Oral Answers to Questions

DEPUTY PRIME MINISTER

The Deputy Prime Minister was asked—

Housing (South-East)

Mark Francois: What representations he has received about the scale of proposed house building in the south-east; and if he will make a statement.

John Prescott: We have received the regional assembly's proposals for the east of England for the period up to 2021, which are now out to public consultation and will be considered in a public examination by an independent panel in September. Proposals for house building in the south-east up to 2026 are expected later this year.

Mark Francois: I thank the Deputy Prime Minister for that reply. He will be aware that, in November 2004, the East of England regional assembly, which encompasses some south-eastern counties, voted for a house building target of 478,000 dwellings by 2021. In December, the same body withdrew its endorsement for its own target on account of the lack of Government infrastructure funding to accompany the house building. Now that even the Deputy Prime Minister's own quango has turned on him, will he—

Mr. Speaker: Order.

John Prescott: Any judgment about how many houses are needed in the north-east will be considered not only by the proposals—[Hon. Members: "The south-east."] It is the same for the south-east and for the east of England. To be clear, the proposals considered included some parts of the south-east as well as the east of England but, whatever the figures, they will be decided in public consultation. I will then appoint an independent review and it will make judgments about whether there is sufficient transport investment—which I believe there will be—to meet the housing requirements. Let the review make its recommendations, and then I will make a proper judgment about them.
	It is rather curious that the hon. Gentleman calls in aid the regional assemblies just when the Conservatives are recommending in the James review to get rid of them as well as the regional government offices that they set up. Some 3,000 people would be made unemployed and the land of the regional development agencies would be sold off. The good, old James proposals go back to the old formula: more on the dole, fewer public services and the typical boom-and-bust policy of the Tories.

Derek Wyatt: We have 8,000 homes in our local plan for the next 10 years. Does my right hon. Friend accept that if the Rushenden link road were built on the Isle of Sheppey it would allow 1,000 extra houses to be built that could be given over to key workers and older people? Some 15,500 older people need housing on the Isle of Sheppey, so will he consider that proposal in the near future?

John Prescott: My hon. Friend has made a considerable contribution to this discussion. As he knows, the proposal is under active consideration by my right hon. Friend the Minister for Housing and Planning. We hope shortly to make a further statement on matters relating to key housing and social housing.

John Hayes: The national land use database reveals that 5,700 hectares of brownfield land have been identified by local authorities as being suitable for housing in the south-east. When that would provide nearly 140,000 new homes, why has less than a third of that land been taken up for housing? Instead of the Deputy Prime Minister's usual bluster, will he confirm that he wants to blitz Britain's countryside because he is absolutely determined to fulfil his pledge that the Labour party invented the green belt and he means to build on it?

John Prescott: That was cutting. Let me give the hon. Gentleman a couple of facts. When we came in, 56 per cent. of houses were built on brownfield sites. The figure has now gone up to 67 per cent. and even beyond the target that we set. That is a remarkable achievement. Secondly, the density of housing has now increased from 25 to 33 per hectare. Therefore, we can now build the 200,000 houses that we need for the south-east on the same amount of land that the Conservatives were building on in 1997.

Local Government

Paddy Tipping: What proportion of local government spending was (a) met by Government grant and (b) raised locally in the 2004–05 financial year.

Nick Raynsford: In the 2004–05 financial year, budget estimates indicate that 74 per cent. of local government revenue expenditure is being met by Government grant, including redistributed business rates, and 26 per cent. by council tax.

Paddy Tipping: Is not the balance of funding wrong? Should not more money be raised locally so that local councillors are more accountable? Is it not a fact that, ultimately, the council tax is unsustainable? When can we see the results of the Lyons review and action on it?

Nick Raynsford: I have a lot of sympathy for the views expressed by my hon. Friend. As he will know, the balance of funding review reported in July last year and concluded that there are strong arguments for shifting the balance towards more local funding, but that depends on the feasibility and desirability of any measures that might be used to achieve it. That is precisely what the Lyons inquiry is looking at, and it expects to report by the end of this year.

Edward Davey: The Minister says that the Lyons review is considering these issues. Will he confirm that it is subject to the Freedom of Information Act 2000? What support is his Department giving Sir Michael Lyons to ensure that the inquiry's working papers and research are accessible to the public as soon as they are available?

Nick Raynsford: The Lyons inquiry is independent, so the hon. Gentleman should pose his question directly to Sir Michael Lyons himself. However, I assure him that a great deal of detailed work has been done. As he will know, because there was a Liberal Democrat representative on the balance of funding review, all the working papers were made publicly available. He will also know only too well that the evidence makes it clear that his party's proposal for a local income tax is a mistake and that it would be impractical and not in the long-term interests of the country.

Bill O'Brien: When considering local government expenditure and finance, will my right hon. Friend examine the major problem that is developing in many areas because health and social care is funded by the Department of Health and local government? Will he take into consideration the need for local authorities properly to fund health and social care?

Nick Raynsford: My hon. Friend makes a fair point, but he will be aware that under recent settlements there has been a sustained increase in local government funding, with a 33 per cent. increase in real terms since 1997. Specifically, the funding that is targeted on social care has increased above the average, so the Government are well aware of the need and are putting money into local government to ensure that the needs of communities are met without imposing unreasonable council tax increases.

Caroline Spelman: Since 1997, council tax has risen by 70 per cent. and average bills are set to top £1,000—the highest ever. At the same time, council tax receipts to the Treasury have soared by 80 per cent. Does the Minister accept that the Office of the Deputy Prime Minister has been filling the Chancellor's coffers by stealth and that the sooner it is gone, the sooner we can restore fairness and accountability to local government?

Nick Raynsford: In terms of fairness and accountability, when the hon. Lady's party was in power grants to local government were cut year after year and local authorities were faced with the real problem of trying to meet local needs without adequate finance. Since this Government have been in power, the grant to local government has increased by 33 per cent. in real terms, which has enabled councils to budget prudently. If she were really worried about council tax, she would be talking to Conservative councils, because they had the unenviable record last year of setting larger increases than Labour councils—5.4 per cent. compared with 4.7 per cent. Labour is leading the way on keeping council tax down.

Louise Ellman: How much of Liverpool's growing success does my right hon. Friend attribute to the Government's increased funding for its local services?

Nick Raynsford: My hon. Friend makes a good point. It has been possible for councils throughout the country to make real improvements, as the comprehensive performance assessment published by the Audit Commission at the end of last year demonstrated. There have been real improvements to performance, and public needs have been met more effectively because of much more generous funding from the Government, and we are proud of that.

House Building

Henry Bellingham: When he next expects to meet representatives of county councils from East Anglia to discuss house building targets.

Keith Hill: The East of England regional assembly produced a draft spatial strategy in November, which included modest increases in house building figures. The Government will give their response to the proposals in the course of the public consultation that is under way and will be followed by an examination in public later this year. Of course, if the Conservative party were to come to power during that period, its planned £1 billion cut to the housing budget would mean fewer homes for the sons and daughters of hard-working families in the east of England, less affordable housing and more homelessness.

Henry Bellingham: Is the Minister not aware that his house building targets for East Anglia have met overwhelming opposition—even the East of England regional assembly rejected them? Does he not understand that people in Norfolk want more affordable housing for local people, not thousands of ugly four-bedroom homes on greenfield sites that will be bought by commuters, second-home owners and retired people?

Keith Hill: The hon. Gentleman will be aware that the East of England regional assembly voted in favour of the new planning figures before the Tories on it voted against them a fortnight later. He talks about affordable housing, but the fact of matter is that the east of England region has received the highest increase in new investment for affordable housing—50 per cent.—of any region in the country. Under the proposals in the James report, all that investment would be removed, so what would the hon. Gentleman say to his constituents whose children are desperately in need of homes in which to live?

Stephen McCabe: Could those representatives and the representatives of all other Tory authorities be advised of the implications not only for housing but for a range of Government initiatives directed at the poorest sections of society if the act of wilful vandalism promised by the shadow Chancellor were ever to be visited on the Department?

Keith Hill: My hon. Friend is entirely right. That set of proposals would devastate investment in our cities, investment in housing and investment in essential local services. The Conservatives will be held responsible in the months ahead, and we look forward to their having to account to themselves and their electorate for such devastating proposals.

Bernard Jenkin: May I point out to the Minister that his Government's record on building social housing and reducing homelessness is a good deal worse than that of the last Conservative Government? May I serve notice on him that the people of Great Bromley, Elmstead and Frating do not want a Labour-inspired new town imposed on rural Essex? Rural north Essex is not for sale.

Keith Hill: The hon. Gentleman ought to revisit his statistics. The Government are investing three times the level of funding for new social housing that we inherited in 1997. Under the new proposals only an additional one in eight new homes is proposed for the east of England region. If those homes are not to be delivered, he must explain to families in his constituency why their children, who are so desperately in need of new homes, will not receive them and why the Conservative party opposes that provision.

Housing Renewal

Valerie Davey: What steps his Department is taking to identify and spread good practice by local government in housing renewal work.

Phil Hope: The Department is fully committed to improving the quality of the private sector housing stock by encouraging, through financial support and guidance, the development of innovative housing renewal policies by local authorities. In particular, the Department is supporting the work of the four councils awarded beacon status for housing renewal in 2004. I am pleased to put on record the excellent leadership role played by Bristol city council as one of those four beacon authorities.

Valerie Davey: Indeed. Bristol city council's housing section has been awarded additional funding, particularly in connection with training for the health and safety ratings system, and in relation to houses in multiple occupation it has involved the police, the fire service and the university in that training. Will my hon. Friend join me in commending the department's staff for the quality and range of the work that they are doing?

Phil Hope: My hon. Friend is right. I am delighted to congratulate the staff of Bristol council and its partnership agencies with which they have been working to protect the health and safety of the most vulnerable tenants, who are at the forefront of our drive to improve housing conditions. We would like other local councils to follow the example of authorities such as Bristol in establishing those strong partnerships so that we can protect vulnerable families in high-risk housing. Such families would suffer most from the £1 billion cuts to housing budgets that the Opposition would inflict on local authorities, were they ever to get into power.

Sydney Chapman: Is it the Minister's experience after two years that the Regulatory Reform (Housing Assistance) (England and Wales) Order 2002 is working better than the old Housing Grants, Construction and Regeneration Act 1996? If so, will he say how many properties have benefited in kind or in cash, excluding those that were being helped and continue to be helped by disabled facilities grants—about 27,000 grants a year?

Phil Hope: I may not be able to give a detailed reply now to the hon. Gentleman's questions about people with disabilities, but the regulatory reform order on housing renewal has been very successful. It has given housing authorities greater discretion in giving grants, loans and equity release packages to homeowners, as well as the grants. We set a target to increase the proportion of vulnerable households in the private sector who live in decent homes from 57 per cent. in 2001 to 70 per cent. in 2010. That is good news for those vulnerable households. I will write to the hon. Gentleman with the details that he asked for. I might also include in the note the potential impact of the £1 billion cut in housing budgets that the Tory party would inflict on those vulnerable households and families.

Clive Betts: I am sure that my hon. Friend would like to identify as an example of good practice the work of Sheffield city council and tenants' representatives in the city in consulting on and then developing and creating the citywide and area arm's-length management organisations, which will certainly improve the city's housing in the next few years and bring it to a decent standard. Will he give an assurance that, as part of the internal review on ALMOs, there will be no reduction in the funding available to ALMOs to create decent homes, and that there will be no attempt to remove the right of ALMO tenants to have their homes remain in the ownership of the city council, which is one of their most important features?

Phil Hope: I am happy to congratulate Sheffield on its excellent record. The important feature of an ALMO is that the stock remains in the ownership of the local authority. There are now 50 ALMOs covering a total of some 700,000 council homes—about one in three of all local authority stock. That is a remarkable achievement. Those homes are being improved. Hundreds of millions of pounds are being spent—with another £2 billion being invested to upgrade homes in the social sector—to ensure that vulnerable people, people from all walks of life, have decent homes in which to live.

Travellers

Ann Winterton: If he will make a statement on enforcement action available to local authorities in respect of unauthorised Travellers' sites.

Yvette Cooper: Local authorities have a range of enforcement powers available to prevent inappropriate development. They need more powers to be able to take swift action to prevent damage from being done, and that is why we are introducing temporary stop notices. We also expect local councils to do more to identify appropriate sites so that Gypsies and Travellers have somewhere else to go.

Ann Winterton: Middlewich and the surrounding areas in my constituency have been blighted over a number of years by illegal encampments, and local residents believe that the Human Rights Act 1998 militates against the law-abiding citizen. Notwithstanding the Minister's reply, even more robust powers are needed to allow local authorities to seize and remove illegally parked caravans, and to allow courts to levy fines that—

Mr. Speaker: Order. The hon. Lady is making a speech.

Yvette Cooper: The hon. Lady will know that I obviously cannot comment on the details of her individual case, but I can say that local councils have powers to remove caravans at the end of the planning process, for example, and the police can take action where there are unauthorised encampments. I disagree with her concerns about the Human Rights Act, which insists that the rights and responsibilities of Gypsies and Travellers be considered, but also the rights and responsibilities of the settled community. The real underlying problem here is that we do not have enough appropriate sites for Gypsies and Travellers to move on to. If we expand the number of appropriate sites, it will be possible to take much swifter action. More enforcement is needed, but that needs to go hand in hand with local councils doing more to identify appropriate sites as well.

Andrew Bennett: Does my hon. Friend agree that the real problem is the lack of sites for Travellers, and is it not high time that local authorities were forced to provide sites and to ensure that under the planning system Travellers can buy land to provide sites?

Yvette Cooper: The Select Committee on the Office of the Deputy Prime Minister, which my hon. Friend chairs, has done some important work on the issue. I agree that we need more sites, and that is why we are consulting on new planning guidance, which would oblige local authorities to identify sites in their local plans, and if they did not the planning inspector would be able to intervene.

Affordable Housing

Nicholas Winterton: If he will make a statement on the provision of quality affordable housing.

John Prescott: Investment in affordable housing will be about £2 billion in 2007–08—double what it was in 1997. This will provide for 75,000 new social homes for rent by 2008 and help a further 40,000 into home ownership. New build homes from that programme will fulfil regionally identified needs and reach the demanding standards for design quality and environmental performance.

Nicholas Winterton: Does the Deputy Prime Minister accept that quality affordable housing often forms part of a larger development? Does he therefore accept from me that the housing moratorium that exists in my constituency is very damaging indeed to the provision of affordable housing? Will he therefore remove that moratorium to enable the economic progress of my constituency to continue and to enable affordable housing to be provided?

John Prescott: rose—

Mr. Speaker: Order. Before the Deputy Prime Minister replies, I say to the House that the noise is intolerable. [Hon. Members: "Hear, hear."] Perhaps those who are cheering me on will take heed.

John Prescott: The hon. Gentleman will be aware that we have improved the quality and design of the houses built, which are reaching a far higher standard. There is no moratorium with regard to social housing. I have looked into the figures, and I can say that there is no moratorium for new homes in Macclesfield; indeed, there are 12,790 additional homes each year, and 1,600 of them will be in Cheshire. That is hardly a moratorium. He must recall that, when he was in the previous Administration, housing investment halved in its last four years, while it has doubled under this Government, providing more homes. I suggest that he talks to those on his Front Bench, as the recent James proposal would take £1 billion out of housing in his constituency and everyone else's.

Ronnie Campbell: Given the increasing number of homeless people throughout the United Kingdom—it is starting to rise in every council area—does the Deputy Prime Minister agree that we should be building houses or encouraging local authorities to spend money to build houses for rent for these unfortunate people?

John Prescott: We have more than doubled the amount of investment since we came to power, and we are encouraging local authorities to invest more in both the improvement of housing and other proposals, even building new housing. I will make a statement about this matter shortly. It is of absolute importance that we build more homes in both the public and private sectors, and we are doing that, but as my hon. Friend will be aware, we inherited such a backlog that we still have some way to go.

Bob Russell: How many of those new affordable homes will be council houses? The Deputy Prime Minister must accept that the private sector has not delivered, that housing associations do not have enough resources and that the number of new council houses built by new Labour is only 3,000 in seven years. The Thatcher Tory Government built 350,000 council houses in their first seven years in power.

John Prescott: The hon. Gentleman has asked a great deal of questions about housing, so he must surely be aware that he should take into account how many social houses are being provided. I understand the point about council housing, but many houses are built by the Housing Corporation, and transform building will improve many houses, so it is a different category of definition. I say to the hon. Gentleman that I am not against building council houses, but at the moment there is a desperate need for us to put the investment back into improving the £19 billion disinvestment in council housing that had taken place when we came to power in 1997. Bringing 2 million houses up to decent standards is our objective, and we are on our way to completing it.

Grassmoor Lagoons

Harry Barnes: If he will discuss with the Secretary of State for Trade and Industry extending funding approved for remedial work and development at the former Avenue Cokeworks site in north-east Derbyshire to the clearing up of the connected tar beds deposited at Grassmoor lagoons.

Phil Hope: The Government of course accept that they have inherited a liability in respect of the Grassmoor site. My hon. Friend is aware that the Department of Trade and Industry has agreed to fund a study, which is already under way and will, we hope, be completed around May this year, to update the remediation strategy on that site.

Harry Barnes: Is my hon. Friend aware that Grassmoor lagoons are in the middle of a country park and contain residue from a cocktail of chemicals deposited in liquid from nearby Avenue cokeworks, which was closed 12 years ago, although it is brought back to life when it rains, creating many problems in the area? Now that the Office of the Deputy Prime Minister has supplied a very welcome £104 million to tackle the problems of Avenue cokeworks, does that not add to the case for the Grassmoor lagoons to be dealt with, which means that we should encourage the Department of Trade and Industry to act quickly?

Phil Hope: I have some good news for my hon. Friend and his neighbour, my hon. Friend the Member for Bolsover (Mr. Skinner): the Department of Trade and Industry has already put aside an additional £4 million to cover liabilities at the Grassmoor site, and it will make a further announcement once the strategy is complete. That is good news for the environment and the local community. In sharp contrast, the Conservative party would make cuts through its £1 billion attack on the ODPM and the housing budget.

Fire and Rescue Control

Laurence Robertson: If he will make a statement on his planned regionalisation of fire and rescue control rooms.

Nick Raynsford: The plan to replace the existing 46 control rooms in England with a network of nine regional control centres is being implemented for reasons of resilience and public safety. The new centres will ensure more effective responses to local, regional or national incidents, while also allowing a more efficient redeployment of resources.

Laurence Robertson: Is the Minister aware of the enormous opposition to that scheme across the country from councils, local people and the fire service itself? Why does he feel that all those people are wrong and that he is right? Will he take into account the circumstances in Gloucestershire, where the fire and rescue service emergency room has recently moved into a new tristar centre? His proposal is not only expensive but wrong.

Nick Raynsford: Everyone who examines the issue closely realises that the new investment will provide enormous gains through better technology, which will identify where calls come from and automatically mobilise those appliances best placed to respond to them. When people understand the implications, they welcome the investment, which will improve the quality of the service and save lives. As far as Gloucestershire is concerned, his county's current tri-service arrangement involves the expenditure of £112 on each incident, whereas the cost of the regional control centre will be £52 per incident. Halving the cost will allow money to be spent on fire prevention and saving lives.

PRIME MINISTER

The Prime Minister was asked—

Engagements

Vera Baird: If he will list his official engagements for Wednesday 12 January.

Tony Blair: Before I list my engagements, and in view of my statement to the House on Monday on the tsunami, I shall update the House on the current figures for British losses. The number of confirmed dead remains at 51. The number of category 1 missing—those most likely to be lost— is, including the 51 confirmed dead, now 410, which is down from 453 on Monday. The category 2 figure—those unaccounted for but not in the highly likely category—now stands at 624, which is down from 871 on Monday.
	I am sure that all hon. Members will join me in sending our warmest congratulations to the newly elected Palestinian President, Abu Mazen. Let us hope that his victory with a strong majority and strong mandate will give us the chance to move the middle east peace process forward.
	This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I will have further such meetings later today.

Vera Baird: Will my right hon. Friend join me in congratulating Redcar steelworks, which won a contract in December to export all the steel that it can produce for the next 10 years? The regional development agency supported that process, as it recently supported investment in the Teesside chemicals industry. Unemployment in my constituency is now being slashed. Will my right hon. Friend ensure that RDAs are not cut from future budgets?

Tony Blair: I congratulate my hon. and learned Friend's constituents on winning the necessary contracts for steel production in Redcar and elsewhere. Under this Government, the RDAs will continue to have the budget that they need to make a difference to thousands of jobs up and down this country. We therefore completely reject the Conservative party's proposals, which are to cut the budgets of the RDAs, to put more people in the dole queue and to place our local economies at risk.

Michael Howard: I am grateful to the Prime Minister for his statement on the victims of the tsunami. I wholeheartedly join him in the congratulations that he has expressed to Abu Mazen. I am sure that the whole House hopes that the election will mark a significant step forward in the middle east peace process.
	When the Chancellor told the Prime Minister that
	"there is nothing that you could ever say to me now that I could ever believe",
	how did the Prime Minister reply?

Tony Blair: I am afraid that the question does not arise, since the Chancellor did not say that to me; the claim in the book happens to be wrong.
	Let us turn to the issue of substance and policy. Since the right hon. and learned Gentleman has mentioned the Chancellor, let us talk about the economy. Perhaps he will explain why under this Government, since 1997, there are 2 million more jobs, and perhaps he will confirm that when he was Employment Secretary there were 1 million more unemployed. I know that the Conservative party does not want to hear that, but that is what they will be hearing from now until polling day.

Michael Howard: The Prime Minister denies that the Chancellor said those things, but the Chancellor yesterday had every opportunity to deny them and, as we all know, he pointedly refused to deny them. Perhaps the Prime Minister is the only person who did not notice. What the Chancellor said could not be more damning. He said that
	"There is nothing that you could ever say to me now that I could ever believe".
	Why did the Chancellor not deny that yesterday?

Tony Blair: Both the Chancellor and I have dismissed what is in books as the tittle-tattle that it is. Let us turn to another policy issue. The right hon. and learned Gentleman said yesterday that it is time that we focused on the people's priorities, so let us focus on one: mortgages. Will he confirm—[Interruption.]

Mr. Speaker: Order. The Leader of the Opposition and the Prime Minister are allowed some leeway during Prime Minister's Question Time.

Tony Blair: When the right hon. and learned Gentleman was a member of the last Conservative Government, interest rates were at 15 per cent. for a year and at 10 per cent. for four years. Under this Government they have been halved. Is not that what we should focus on?

Michael Howard: The Chancellor says what we all think: the Prime Minister goes on and on about all these things but no one believes a word he says. The Prime Minister can clear all this up very simply. Did he ever say to the Chancellor that he was going to stand down before the election—yes or no?

Tony Blair: I have dealt with that on a number of occasions. I have explained why no one does deals over jobs such as this. That has been said constantly.
	The right hon. and learned Gentleman said that no one would believe a word we say. Well, there are 2 million more jobs. Mortgage rates have been half of what they were under the Conservative Government. Mortgages, inflation and unemployment are the lowest that they have been for over 30 years. Which one of those statements is false?

Michael Howard: The Prime Minister says—[Interruption.] The Prime Minister says that he does not do deals over his job, but he did a deal over his job over dinner at Granita. He did a deal over dinner at Admiralty house. He is the deals on meals Prime Minister. No wonder the Chancellor is not a happy eater.
	Now let me tell the Prime Minister why these things matter. The spokesman for senior civil servants has said that
	"Number Ten and the Treasury . . . have . . . conflicting and competing agendas for Government".
	He said that
	"Departments . . . have to try to make sense of this battle".
	He also said:
	"It's not good Government."
	This is something that goes directly to the heart of Government. That is why it is important. So let me ask the Prime Minister again: did he tell the Chancellor that he would stand down? Does he deny it—yes or no?

Tony Blair: I have already dealt with that on a number of occasions and I have no intention of going back over it again.
	I notice that the right hon. and learned Gentleman did not deny a single one of the economic facts that I gave him. Perhaps he will also confirm this: that as well as the economic record on low mortgages, low inflation, low levels of unemployment, and high levels of employment, waiting lists are now down by more than 300,000 on the number that we inherited from him, and primary school results are now up from just over half the kids getting them to almost 75 per cent. Perhaps he will also confirm this: that under this Government, there are 12,000 more police officers. When he was Home Secretary, he cut the numbers of police officers by 1,000—true or false?

Michael Howard: Crime fell by 18 per cent. when I was Home Secretary—that is all anybody needs to know about my record. The Prime Minister wants to talk about his record, so I will tell him about it. We have more than 1 million children playing truant from schools, we have more people dying from hospital infections than dying on Britain's roads, and there are more than 1 million violent crimes. How can there be discipline in schools when there is no discipline in Government? How can they clean up our hospitals when they cannot clean up their act? How can they fight crime when they are fighting each other?

Tony Blair: I can tell the right hon. and learned Gentleman very simply. At long last, we have got on to our record, so let us be quite clear what it is: under this Government, we have economic stability and success. When he was a member of the last Government, there were two recessions. People remember the negative equity, the high mortgages and the 3 million unemployed. They remember what happened under the last Conservative Government, and they remember something else that I have not mentioned before—that he was the Minister responsible for introducing the poll tax. [Interruption.] Well, come on—true or false? Did he introduce it? Yes, he did. Therefore, at the next election, whenever it comes, he can stick up whatever he likes on billboards about something in a book, but what the public will concentrate on are the low mortgages, low inflation and low unemployment that we delivered and he failed to.

Clive Soley: Is not one of the questions that will interest the people of this country for many years to come that of baby bonds, which come into full effect in April? Am I not right in saying that we need to give full publicity to this, because it not only starts people off with a pocket of money but enables others to put money into those accounts to encourage saving and, above all, to help to end poverty when those youngsters reach the age of 18 with a significant sum of money for the future?

Tony Blair: I agree entirely with what my hon. Friend says about baby bonds—the child trust fund—which will be very popular in the country and will help to encourage saving as well as giving young people some stake in the future of the country. However, there are other areas, such as child care, where we are extending the boundaries and frontiers of the welfare state. That is why it is so important that we continue the investment in such things throughout the next few years, and why the Conservatives' proposals, which would cut public spending in some of these vital areas, would be so disastrous for Britain.

Charles Kennedy: I am sure that the Prime Minister would wish to join me in paying tribute to the emergency personnel across the north of England and the length and breadth of Scotland who are coping with the severity of the atrocious weather of the past few hours. Indeed, Mr. Brian Downie, the principal emergency planning officer of the Highland region, described it to me earlier today as the worst that he has experienced professionally in almost 20 years. I am sure that we are all grateful to these people, who are working tirelessly and in dangerous conditions to restore power and other services to people throughout the communities affected.
	Turning to a political issue, does the Prime Minister acknowledge that the Chancellor's proposal for a Marshall plan for Africa can be realised only if the United States, in particular, were to come on board? Does he agree that one of the best ways to convince President Bush of this approach and to support the international finance facility is to ensure that it is based on the principle of good governance within Africa and on the fact that people can be reassured, not least in the States, that the money that is being given is used properly for the purposes for which it was given?

Tony Blair: On the first point, it is right to pay tribute to all who have been involved in the emergency response to the floods—the fire, ambulance and police services, the local authorities, the Environment Agency, the Scottish Environment Protection Agency, the coastguard, mountain rescue and those involved in the military aspect. We should also thank the voluntary organisations, because they are helping to care for those affected. I offer condolences, I am sure on behalf of the House, to the families of those killed and extend sympathy to those who are experiencing stress and structural damage to their homes. My hon. Friend the Minister for the Environment and Agri-environment will respond to an urgent question in the House on that afterwards.
	On the Africa plan that we intend to put to the G8 this year, the international finance facility is one way, although not the only way, to extend the amount of aid that will be available to Africa. I also entirely agree that good governance and, for example, conflict resolution must form part of the plan that we intend to present.

Charles Kennedy: I thank the Prime Minister for both replies. He will know about the interest in recent reports that he may be considering merging the Foreign Office with the Department for International Development, to create a new super-Ministry. Is that proposal under active consideration? If so, does the Prime Minister believe that the Chancellor of the Exchequer might consider that post to be the suitable job promotion that he is looking for?

Tony Blair: I am sorry to say that that is not under consideration. The creation of a special Department for International Development has been a worthwhile innovation by the Government. There was some nervousness about it in many quarters—possibly even in some parts of the Foreign Office—when it happened. However, one of the most interesting aspects of events in the past seven and a half years has been the establishment of our Department for International Development as probably the most respected such Department in the world. I want to keep it that way.

Brian Wilson: In connection with the recent extreme weather conditions in many parts of the United Kingdom, will the Prime Minister join me in expressing special appreciation to the employees of the power companies who have worked so valiantly to keep the power supply going, often in treacherous conditions? Will he also acknowledge that the robustness of the power infrastructure in any part of the country in such circumstances is directly related to ongoing investment and maintenance? We therefore welcome the recent Ofgem price review, which made some progress on that, but will my right hon. Friend ensure that every corner of the country is served by power infrastructure companies that are obliged to make the necessary investment at all times to avoid power cuts when such conditions occur?

Tony Blair: My right hon. Friend is right. I am happy to pay tribute to the work of the employees of the power companies. I should add that it is also important to maintain the investment in flood defences, which is now approximately £570 million a year, or due to be that amount in the next financial year. I am afraid that that shows the extent of the investment that we have to make to deal with what people increasingly regard as changed weather circumstances that have something of a permanent feature. That is one reason why it is important for the G8 to focus on climate change as well as Africa.

Edward Leigh: In the past three years, I have spent much time interrogating civil servants. On all occasions, I have found them to be frustratingly loyal to Government in presenting Government policy as a seamless robe. How, therefore, does the Prime Minister respond to Mr. Jonathan Baume, the leader of the First Division Association—the mandarins' union—who recently said, not in a book but in a recorded statement, that civil servants were having difficulty in making sense of the competing agendas of No. 10 and the Treasury? If civil servants are loyal to Government, is not loyalty a two-way street?

Tony Blair: As I told the right hon. and learned Member for Folkestone and Hythe (Mr. Howard) a moment ago, the Government's agenda is clear on the economy and investment in public services. The most important thing is to point out that, for example, last Friday, we had the waiting list figures for the national health service, compiled on exactly the same basis as they have been compiled for years, and as a result not only of investment but of reform in the NHS, they are at their lowest since records began. Now that is a demonstration of the Government's commitment.
	I understand civil servants' anxiety, particularly when we are asking for big job reductions in the civil service, but we can see in the record of this Government the ability not just to run the economy well but to invest in public services. I should like to quote back to the hon. Gentleman something that he said on the "Politics Show" a short time ago:
	"What I believe is that if you want to spend more money on the NHS, if you want to spend more money on state education, you are going to vote Labour".
	I fully endorse those sentiments.

Chris Bryant: In the run-up to Christmas last year, UK lenders sent out 140 million unsolicited, pre-approved credit card application forms, and a similar number of unsolicited, pre-approved personal loan applications. Does the Prime Minister condemn the tactics used by many credit card companies and banks to encourage families to take on levels of debt that they cannot possibly afford? Will he consider further measures to curb this irresponsible marketing?

Tony Blair: My hon. Friend is right on the general point that he makes about the importance of legislation such as the Consumer Credit Bill, which I understand has its Commons Second Reading tomorrow. That is obviously important. There is also an action plan, which we published last July. In the priorities that it sets out for work by consumer credit companies, banks and others, the access to affordable credit and high-quality, free debt advice is central. I agree that it is important that the powers that these companies have should be exercised responsibly, and we will do our level best to ensure that they are.

Philip Hammond: In case after case before the courts, local authorities have lost out to Travellers pleading the human rights agenda in defence of unauthorised encampments. Are the Government willing to legislate to stop human rights laws being used to drive a coach and horses through our planning system, as the Leader of the Opposition has pledged a Conservative Government would do?

Tony Blair: We have the new enforcement notices coming into provision this week—

Philip Hammond: indicated dissent.

Tony Blair: Before the hon. Gentleman shakes his head, perhaps he will listen to my answer. This is a new power that will allow local authorities to act very quickly indeed. However, let me make it clear that, if the experience of that new power—which local authorities and others say will be both necessary and important in enforcing the law properly—turns out to be inadequate, we will look at this again. I entirely agree that the interests of the ordinary public have to come first, but we want to ascertain, first of all, whether the legislation that we already have is deficient in some way before we look at fresh legislation. We believe that it will not be deficient, and that it will work.

Karen Buck: After years in development, the business case for the revised Paddington health campus has just been submitted to the Department of Health. This is the most prestigious and ambitious hospital development to have been attempted in this country, and the benefits will be huge. It will mean new facilities, and clinical and financial benefits, for international institutions such as the Brompton, Harefield and St. Mary's hospitals. It has been a difficult scheme to develop because it is ambitious and complex, but the cost of failure would be very great. Will my right hon. Friend ensure that it proceeds with all speed, as we are now within reach of one of the finest jewels in the NHS crown?

Tony Blair: I know that the Minister of State, Department of Health, my right hon. Friend the Member for Barrow and Furness (Mr. Hutton), is attending a meeting next week to discuss this, and I actually know a bit about it myself, having seen the site. It is an extraordinary, imaginative design. My hon. Friend will know that, as a result of the action already taken, in-patient and out-patient waiting lists and the amount of time people have to wait at the accident and emergency department at St. Mary's are already substantially down from 1997. These will be state-of-the-art facilities that will serve not only that part of London but, in some respects, the whole of the country for years to come. Again, it is an example of why it is so important that we keep the investment programme in our national health service going. Under this Government, it will be kept going.

Elfyn Llwyd: Does the Prime Minister recall promising in 1999 that anybody wishing to access NHS dental provision would be able to do so by the end of 2001? Will he now have the grace to say that that is a broken promise? If, as he says, the Chancellor did not say
	"There is nothing that you could ever say to me now that I could ever believe",
	many of us believe that the Chancellor should have said it.

Tony Blair: I accept that some people are still not getting access to NHS dentists. Let me tell the hon. Gentleman, however, what we are doing: we are bringing some 1,000 new dentists into the service; and we are working with the British Dental Association to try to make sure that we give people access to NHS care. Long-term issues associated with dentistry, however, must also be considered. I accept that these are difficult issues, but it is impossible for anyone to consider the national health service as a whole today, even with problems such as MRSA and others, and to say that it is not definitively better than it was in 1997. Yesterday, I was discussing with health service professionals things that have happened, such as the accident and emergency changes, and they said that whereas a few years ago we were held up at international symposiums as an example of a system that failed, at the most recent international symposium we were held up as an example of the fastest improving service.

Civil Service Jobs

Brian H Donohoe: What the timetable is for the proposed dispersal of civil service jobs; and what plans there are for the relocation of jobs to Ayrshire.

Tony Blair: In broad terms, the timetable is that more than 4,000 posts will have been relocated out of London and the south-east by March 2005, another 6,000 by March 2008, and a further 10,000 by 2010. As I made clear in a letter to my hon. Friend, we are unable to say at this stage how many civil service jobs will be relocated to Ayrshire. Departments are currently working through detailed implementation planning in consultation with stakeholders, including union staff and local stakeholders.

Brian H Donohoe: I am grateful for that answer. I am sure that my right hon. Friend will be aware that I asked him a similar question on 10 November and got a similar answer. What he will not be aware of is that, in the interim, some 162 jobs have been lost with the transfer out of my constituency of civil service jobs in the Department for Work and Pensions. Consequently, will he agree to meet a small delegation to discuss this issue?

Tony Blair: I will certainly be pleased to receive representations from my hon. Friend on the possibility of jobs being relocated to Ayrshire, and perhaps we can discuss further the possibility of a meeting.

Archy Kirkwood: Could I possibly be included in the delegation that comes to see the Prime Minister about this important subject? The hon. Member for Cunninghame, South (Mr. Donohoe) is absolutely right that the Department for Work and Pensions is engaged in a series of centralisation measures that will reduce the numbers of jobs in many areas, such as Galashiels in south-east Scotland, which will feel it hard. Will he also bear in mind, if he is establishing criteria for the dispersal of civil service jobs in future, the fact that many regions will lose European structural funds after 2006, which should also be considered in respect of applications for relocation in future?

Tony Blair: Two separate things are happening. First, we are trying to slim down the numbers of people in Government Departments. A lot of pressure comes from both sides of the House to do so. The Department for Work and Pensions, for example, has already announced a reduction in jobs in the region of 30,000. In terms of a global figure, most people support the process, because it makes sure that we spend money more effectively. Secondly, a relocation out of London to other parts of the United Kingdom is taking place. At the moment, I cannot say exactly where those jobs will go. Certainly, I will listen carefully to any representations that Members make, but ultimately, we are trying to balance the need for efficiency in the DWP and elsewhere with relocation out of London. Inevitably, jobs will be displaced from some areas as a result, but that may well be in the interests of the country as a whole.

Engagements

Anne Begg: A recent NAO survey revealed that women in Aberdeen earn only two thirds of male earnings—the largest pay gap in the whole of Scotland. While I accept that the Government have done quite a lot to address the gender pay gap, not least with the introduction of the minimum wage, what else can they do to end this inequality? Will my right hon. Friend encourage others, such as employers, to take the issue seriously rather than just shrugging their shoulders?

Tony Blair: My hon. Friend's point is entirely fair, which is why the Women and Work Commission is considering precisely how we bridge the pay gap that still exists, as she rightly says. It is important to point out that only as a result of measures such as the minimum wage, the introduction of tax credits, enhanced maternity leave and enhanced child benefit have we been able to raise the incomes of women. It is important to keep all those measures in place, but the Women and Work Commission will look at some of the more fundamental issues so we can make sure that the equal-pay promise made by a Labour Government back in the 1970s is translated into action.

Stephen Dorrell: We understand that the Prime Minister has said that the manifesto on which he intends to fight the next election will be unremittingly new Labour. What words would he use to describe the manifesto on which the Chancellor plans to fight the next election?

Tony Blair: Precisely the same. It will be a manifesto that makes sure that we continue the huge economic record, that we continue the investment—[Interruption.] Oh yes—and in particular it will make sure that, unlike the Government of whom the right hon. Gentleman was a member, who put pensioners and children in poverty, we continue with policies that lift pensioners and children out of poverty and create a fairer and stronger country.

David Winnick: In view of the Government's excellent work in dealing with antisocial behaviour in recent years, would it not be wise to reconsider the possible implementation of 24-hour drinking by pubs and other licensed premises? Does the Prime Minister not agree that binge drinking is already a very serious problem? What sense is there in allowing pubs to be open day and night?

Tony Blair: I will tell my hon. Friend exactly what I think about this. Obviously it is important for us to listen to representations made to us about it. There is a problem with so-called binge drinking, and there is a problem in many places such as city centres where there is fighting outside pubs on Friday and Saturday nights, and sometimes on Thursday and Sunday nights. It should be remembered that we are also introducing greater powers for the police to shut down premises where such things happen.
	My view is very clear. I believe that the law-abiding majority who want to be able, after going to, say, the cinema or theatre, to have a drink at the time they choose should not be inconvenienced. We should not have to have restrictions that no other city in Europe has just to do something about the tiny minority who abuse alcohol—who go out and fight and cause disturbances.
	My view is very, very clear. We should have the same flexibility as other countries have, and then we should come down really hard on those who abuse that freedom and do not show responsibility. But to take away that ability from all the population, even the vast majority who are law-abiding, is not in my view sensible.

Severe Weather

Pete Wishart: To ask the Secretary of State for Environment, Food and Rural Affairs—

Mr. Speaker: Order. Members are stepping in front of the hon. Gentleman who is addressing the House. That is a discourtesy to him and to the House.

Pete Wishart: if she will make a statement on the severe weather conditions in Scotland, Northern Ireland and other parts of the United Kingdom. Thank you, Mr. Speaker.

Elliot Morley: Issues relating to severe weather incidents are devolved to the respective Administrations. However, severe storms have hit Northern Ireland and Scotland in the last 24 hours and caused widespread damage, although full assessments have not yet been made. Let me take this opportunity to express sympathy, on behalf of the whole House, to those who have been affected by the storms, particularly in relation to the tragic deaths that have occurred in the borders and Northern Ireland.
	Tidal surge and high winds last night caused widespread coastal flooding in the west of Scotland. Considerable damage was reported in the Lochaber area, with flooding in Fort William and Caol. The River Lochy and the Ness remain above flood-warning levels. Tidal flooding at Fort William and Caol last night was the highest in 10 years, with 20 houses evacuated and cars flooded. We expect a surge on the east coast of England later today, but although we expect flood warnings to be issued it is unlikely to cause serious flooding.
	I made a statement to the House yesterday on flooding in northern England, which covered many of these issues.

Pete Wishart: I am grateful to the Minister for that thoughtful and helpful reply. I am sure that he agrees with me that the storms that have battered large swathes of Scotland, Northern Ireland and northern England have been particularly devastating and appalling. They have caused unprecedented damage to infrastructure, and many homes throughout those stricken areas remain without electricity or other power. This, of course, is on top of the devastating floods to which the Minister alluded.
	I begin by offering my sympathy and condolences to the families of the three people known to have been killed in last evening's storms, including in the fatal incident on the A90 in my constituency. I join the Minister in paying tribute to the tireless work of our emergency and rescue services, which have worked round the clock to ensure that power is reconnected to many stricken communities and damaged infrastructure cleared. It is entirely appropriate to single out the work of the coastguard and the RAF, which as I speak are trying to save a stricken Spanish trawler off the Western Isles.
	The Minister will doubtless agree that the priority now is to get Scotland, Northern Ireland and northern England moving again. Can he therefore assure me that he is doing all that he can to work closely with the Scottish Executive and local authorities to ensure that the clear-up work is being properly controlled and co-ordinated? Can he also tell me a little about how the Bellwin formula applies in co-ordination with devolved government? As he knows, the Scottish Executive apply that formula, but can further funds be made available to them to help deal with this problem?
	Does the Minister agree that the events of recent days highlight the particular nature of Scotland's infrastructure needs, and will he therefore review the excessive charges now being proposed for electricity generators in the highlands and islands and the north-east of Scotland?
	The weather in the past few days has shown that we are becoming increasingly vulnerable to climate change. Can the Minister therefore assure me that this Government will work with the international community to address the emissions problem, and does he agree that it is ironic that the most stricken areas are perhaps those with the greatest renewables potential?
	Lastly, can the Minister assure me that he will do all that he can to ensure that the public receive all necessary warnings about future inclement weather, and that public safety is regarded as absolutely paramount?

Elliot Morley: As the hon. Gentleman will know, many of the issues that he raises are the responsibility of the devolved Administration, and the Scottish agencies have been working very hard in this regard. I join him in paying tribute to the emergency services, which have responded magnificently. He will be aware that detailed weather forecasts allowed many public and private sector organisations to take steps to mitigate the storm damage by, for example, cancelling trains and ferries. I understand that flood warnings were given and that the relevant system was activated. He might also be interested to know that as part of that process, the long-range RAF Nimrod planes operating in Scotland moved to Lincolnshire, as the severe winds would have prevented their use. As a result, they are able to do an excellent job in giving support to the fishing boat currently in difficulties to the west of Scotland.
	I certainly agree with what the hon. Gentleman says about climate change, which is a reality. The 10 years since the beginning of the 1990s have been the warmest on record, and in the past decade we have had double the normal number of extreme weather incidents. We have to take all necessary steps to reduce the risk to people, bearing in mind that we cannot guarantee that extreme incidents or floods will not occur.
	My understanding is that the Scottish Executive have a formula similar to the Bellwin formula, which they themselves operate. They will put it in place, according to the rules of the scheme.

George Foulkes: I congratulate my hon. Friend on reacting so quickly by going to Carlisle immediately after the devastation occurred. I echo what my right hon. Friend the Member for Cunninghame, North (Mr. Wilson) said during Prime Minister's questions: we must pay tribute not just to all the emergency services, which reacted so quickly, but to the electricity and other industries that also responded rapidly.
	There is a danger—we saw it with the tsunami disaster and we are seeing it here again—of imagining that we can deal with such forces of nature, solve every problem and hold back the consequences in Canute style. There is also a danger, and the hon. Member for North Tayside (Pete Wishart) came close to it, as do his party colleagues, of sitting in the comfort—

Mr. Speaker: Order. The right hon. Gentleman should resume his seat and the Minister will try to answer now.

George Foulkes: rose—

Mr. Speaker: Order.

Elliot Morley: My right hon. Friend is absolutely right. Quite apart from the emergency services, tremendous commitment has been demonstrated in all the flood and gale-hit areas by people from the engineering and other utilities who have worked around the clock unstintingly to reconnect supplies of power and, in Northumberland, water that had been disrupted. I must also mention the voluntary sector, as people from the local communities have come forward and offered their time and support to help the people affected.
	I agree with what my right hon. Friend said about the effects of the flooding and I can assure him that, whenever there is such a major incident, once the emergency is over, there will always be a full evaluation of what went well and consideration given to what might require further investment, organisation or structure. I am confident that the Scottish Executive and Scottish agencies will do that. It is important to note that we share our experience; indeed, the findings of the Bye report, following the Northampton flood of 1998, have helped us to deal with the recent emergencies. Those circumstances were English, but the findings of the report influenced the emergency structures and preparedness in all the Administrations. Those contingency plans worked well, as we have seen effective and efficient responses to the current emergency.

Jacqui Lait: On behalf of Conservative Members, I add our sympathy to the families of those who have died, and to those injured or otherwise affected by the floods and storms, which have caused the loss of houses and property. I also thank and congratulate everyone who has worked so hard to ensure that as much help as possible has been given. That includes the RAF team, and let us hope that the outcome of its search is positive.
	This is probably the first disaster that has affected Scotland since the Scottish Executive were set up. Some of the responsibilities are theirs and some are reserved to Westminster, as the Minister acknowledged. People who have lost homes and belongings will need one-off benefit payments and emergency relief. Can the Minister tell us what Whitehall Departments are doing to ensure that those who need such assistance receive it quickly? Telecommunications and power are also the responsibility of Whitehall. Is the Minister co-ordinating Whitehall Departments to ensure that those services are restored as quickly and efficiently as possible? Apart from the companies that are working exceedingly hard to restore services, can those Departments do more to help?
	Will the Minister tell us whether the Scotland Office has any responsibility in all of this and whether it has sufficient resources to help those in need? Given that the Scotland Office is now part of the Department for Constitutional Affairs, are there sufficient staff knowledgeable enough about Scotland to be able to deal with the problems created by the terrible flooding? Given that the part-time Secretary of State for Scotland is in his place next to the Minister, perhaps the Minister will tell us why he, rather than the part-time Secretary of State, is answering.

Elliot Morley: It is a great shame that the hon. Lady feels the need to make a partisan point about such a serious problem as these gales. I can tell her that the Department for Work and Pensions will offer crisis loans to help those made destitute as a result of the floods if they have no assets or resources. She will be aware that the Government have no facility to help with insurable risks, but limited support may be offered to people who are in severe difficulty.
	Dealing with the follow-on of the gales is a matter for the devolved Administrations, all of whom have the well-established contingency arrangements that I have described. Those tried and tested arrangements also cover the post-flood recovery period. Many of the other points raised by the hon. Lady are matters for the devolved Administrations. This urgent question relates to the whole of the UK, and touches on matters for which I have particular responsibility, such as the Meteorological Office, contingency planning and climate change.

Tam Dalyell: May I pay tribute to the work done by the fire and water engineers, who are extremely courageous and, frankly, often very brave in these circumstances? However, the unpalatable and awkward truth is that many of the people affected are either underinsured or—heaven help us—not insured at all. Should not the Government hold discussions with the insurance companies about what might be done? Some families face appalling problems because, whether it is their fault or not, they have neglected to arrange insurance. We might think that they should have done that, but they have not.

Elliot Morley: My hon. Friend makes a serious point, and I join him in paying tribute to the utilities engineers. Apart from the commitment that I mentioned earlier, they often work in very difficult circumstances to reconnect services.
	Clearly, the insurance problem is a serious one. It is important that people are aware of the need for insurance and that they make sure that their cover is satisfactory. In my experience of these large-scale events, the insurance companies often do their very best to assist people in dealing with problems connected with insurance shortfalls, and with reinstatement. In addition, they advise people about how to rebuild properties in a way that will minimise the risk of flooding in the future and the damage that that might cause.

Sue Doughty: I should also like to express my sympathies to the families and loved ones of those who died or suffered injury as a result of the severe weather. I and my Liberal Democrat colleagues are particularly aware of the difficulties faced by people who are without power and who are living in appalling conditions at present. We are very appreciative of the work being done by the members of the emergency, rescue and voluntary services, as well as by the power engineers.
	In the small debate that followed yesterday's urgent question, many concerns were raised about climate change, and we must take a more immediate look at that problem. What assessment have the Government made of the capacity and robustness of the power and water utility companies to restore services as quickly as possible in what are becoming increasingly frequent occurrences? Given the events of the past 24 hours, following the Minister's announcement that the Bellwin scheme would be implemented, has he identified any further assistance that the communities involved may require? What review is he undertaking of the impact of building on floodplains? Not only are those buildings vulnerable themselves, but they cause water to be displaced and affect other properties. Will he be requesting the Office of the Deputy Prime Minister to change current planning regulations?

Elliot Morley: I agree that we must take into account the impact of climate change on infrastructure, such as overhead power cables, the whole national grid, and the water supply. The Government have a climate change programme to study that impact, and the hon. Lady should be aware of the work of the foresight programme, which tries to assess future flood risks as a result of climate change. The Government are committed to taking a precautionary approach to the potential impacts of climatic change, as it would be foolish to assume that those impacts would not be severe.
	The hon. Lady asked about applications under the Bellwin formula. She will appreciate that the priority for local authorities is to deal with the immediate flood and gale damage. Local authorities have four weeks after such events to indicate that they intend to apply, so it is rather premature to talk about applications that have been made. However, authorities are well aware of the Bellwin formula rules. If they qualify, they will be assisted through the ODPM in the normal way.
	The hon. Lady is right about building on floodplains; roads, hard areas and concrete can affect run-off, too. That must be taken into account in planning applications and guidance has been given to planning authorities, through planning policy guidance note 25, to make it clear that in some cases building may be inappropriate while in other cases where development is appropriate, the developer may have to make a contribution, not only to protect the new development but to mitigate against the possible consequences to existing development.

David Cairns: I add my appreciation to that of the hon. Member for North Tayside (Pete Wishart) for the work of the coastguards, especially those of Her Majesty's coastguard agency, Clyde, based at Greenock in my constituency.
	This is the first significant test for the new provisions under the Civil Contingencies Act 2004, although it may be too early to tell whether they have had an improved impact on the performance of the agencies. As the coastguard modernises, changes and takes on additional responsibilities, is not this a timely reminder that we must not lose sight of its core function, which is to save those whose lives may be in danger at sea? If it takes on other responsibilities, can we ensure that there is still specialised training for volunteers, who often put their own lives at risk to save those in peril on the sea?

Elliot Morley: My hon. Friend is right. The Maritime and Coastguard Agency played an extremely valuable role in the emergency. It is probably a bit too early to see the effects of the civil contingencies provisions, and I repeat the point that all local authorities, whether in England or in the devolved Administrations, have existing contingency plans and we have seen them put into action. I also repeat that, after a large-scale event of this kind, we would expect an evaluation and lessons learned, which will feed through to individual agencies, such as the coastguard, as well as to local authorities and other groups.

Gregory Campbell: I join the Minister in passing the condolences of the House and of my party to those who died in such extreme weather conditions. We commend all those involved in the emergency services.
	My question relates to one of the fatalities in Northern Ireland. The Foyle bridge in Londonderry is normally closed when weather conditions less extreme than those predicted yesterday occur. Will the Minister liaise with the Northern Ireland Office to establish why the bridge was not closed yesterday?

Elliot Morley: The hon. Gentleman makes an important and serious point. As he will appreciate, I cannot give him an answer at the moment, but I assure him that I will contact the Northern Ireland Office to ensure that his point is addressed.

Alan Williams: Although the Minister gave reassuring information about the response of the insurance industry, will he hold discussions with insurers about the future terms and cover that they will offer people living in the affected areas?

Elliot Morley: Yes, I meet the Association of British Insurers, the trade body, regularly, as do my hon. Friends at the Treasury, who have the lead responsibility in dealing with insurance companies. We have a good relationship with the ABI; there is clearly a range of issues of interest, not least the provision of insurance cover, its availability and cost. We want a strong and robust market for insurance cover so that consumers have a range of choices and can thus choose the best price and the best cover for their circumstances.

Roy Beggs: My colleagues and I congratulate the hon. Member for North Tayside (Pete Wishart) on his urgent question, and we welcome the responses that the Minister has given so far. On behalf of my colleagues, I express our condolences to the relatives of those who lost their lives in those extreme weather conditions and pay tribute to all the emergency services.
	The Larne to Cairnryan ferry was grounded overnight. Thankfully, there were no injuries or loss of life, as far as I am aware, but it is disappointing that the Minister was not fully briefed about the situation in Northern Ireland—one would have thought that he would have been. Can he confirm that the 19 men on board the missing fishing vessel that had lost contact due to loss of power are safe and likely to be rescued?

Elliot Morley: I can certainly answer the hon. Gentleman's question about the fishing boat. I am glad to say that an RAF Nimrod, which has been operating from RAF Waddington—very close to my constituency—found the fishing vessel. The boat has lost power and although the crew are safe at the moment, the vessel is in danger and in difficulties. I understand that the Nimrod is on standby in the area and has asked for assistance from other vessels to tow the boat to safer waters.

Brian Wilson: Does my hon. Friend agree that although we cannot control the forces of nature, episodes such as this demonstrate why it is essential to have a Government who are committed to high levels of investment in the public infrastructure? I have two examples. Largs in my constituency has always been the victim of such flooding; in recent years, there has been a flood investment programme, funded by the Scottish Executive and—touch wood—it appears to have been effective last night. Secondly, I spoke to Scottish Power this morning. In 1998, there was a six-figure number of disconnections—more than 100,000. The number is 6,000 for the current year. Conditions are not identical, but there has been a massive programme of tree lopping, strengthening the infrastructure and raising the wires. All of that makes the difference, when the day comes, between power cuts and continuity of supply.

Elliot Morley: I can certainly confirm to my right hon. Friend that the Scottish Executive have given high priority to their financial commitment to flood defence and to taking the action on infrastructure that he outlined to try to minimise destruction and damage from extreme weather events of this type. In England and Wales, the flood defence budget has been increased from £300 million in 1997 to a projected £570 million for the next financial year. That is a significant commitment by the Government, who are working hard to reduce risk for people in all our countries.

Paul Tyler: The Minister will be aware that this morning, by coincidence, the Environment Agency published its report on the devastating flood in Boscastle and surrounding north Cornwall villages. He has already indicated that it is extremely important to learn lessons from every episode, not least, as he has just said, in relation to insurance cover, risk assessment by the Environment Agency and planning. Can he go a step further than the Prime Minister was able to do earlier and indicate how important it is to see the direct linkage between incidents of severe weather impact on the United Kingdom and climate change? As the Government are in a leading position in the G8, what new initiative do they intend to take to raise the priority of dealing with climate change, especially in relation to our American partners and the United States President?

Elliot Morley: The Environment Agency report on Boscastle is significant and useful; it goes into the background to the Boscastle flood in considerable detail. The report is not only useful for the people of Boscastle; it concludes that the flood was one of the most extreme weather events ever recorded in this country, so in terms of risk, it gives some reassurance for the future. Furthermore, the findings of the report on the nature of the flood will be helpful in assessing risk for all communities living in steep-sided valleys, so it is also useful in that sense.
	The hon. Gentleman will be aware that the Prime Minister has given an international lead on the priority for climate change. In the G8 presidency, which the hon. Gentleman mentioned, climate change and Africa will be key themes. As part of that, the UK is hosting a major international science conference at the Hadley centre in February, when there will be an opportunity to look at the science of climatic change and address important issues. For example, what is the risk in relation to global warming, and what are the long-term consequences? I agree that climate change is a global issue, and that it is essential that every nation plays its part, particularly industrial nations, including the one that is the biggest single polluter.

John Thurso: I understand from Highland council this morning that 20,000 homes are without power in the area. Many of those homes are in my constituency, where there is no power from the south Sutherland border on the west coast across to Tongue on the north coast. Will the Minister join me in paying tribute to Highland council and to the valiant efforts by the utilities engineers to restore power as well as other services? What studies are being made of tidal action? I understand from a conversation this morning that we have the highest tides in living memory at Scrabster, and water is washing the bottom of my house in Thurso—I certainly do not remember that happening before. What studies are being made of tidal movement, as opposed to flooding?

Elliot Morley: Again, I appreciate the hon. Gentleman's comments about the utility companies and their staff, who are working hard to reconnect the power. He is quite right about tidal action and the risk of floods. Following the 1953 disaster, this country probably has one of the most sophisticated tidal surge prediction and warning systems in the North sea, which we share with Holland and France. It enables us to predict tidal movements with some accuracy, and we also have warning systems and contingency plans. As I mentioned in my opening remarks, a surge is predicted in the North sea and on the west coast of Scotland. However, because of the nature of the tides at present, significant flooding is not expected.

Lembit �pik: Two significant rivers, the Clywedog and the Severn, originate in my constituency. Is the Minister aware of an experiment carried out over the past few years to drop the level of the reservoirs, thereby reducing flooding during periods of severe weather in the Severn valley and elsewhere? Would he look at that successful experiment, and consider rolling it out elsewhere? Does he accept that there is no doubt at all that much of the climate change that we are experiencing is a direct consequence of the polluting activities of human beings?

Elliot Morley: Yes, I am aware of work to lower the level of reservoirs in winter and possible storm periods so that there is capacity for a surge. Although that is useful, the hon. Gentleman will appreciate that in a large-scale storm and extreme weather a reservoir is quickly overwhelmed. Although that practice has some benefit, it will not stop widespread flooding. Nevertheless, that possibility is being looked at. As for climate change, it is a fact and a reality, and there is no doubt that it is caused by the activities of humans. ??

Points of Order

David Trimble: On a point of order, Mr. Speaker. In his response to the urgent question, the Minister for the Environment and Agri-environment made it clear that the issues involved related to England, Scotland and Northern Ireland. It was painfully clear, howeverI am sure that it was not through any fault of his ownthat he was not briefed to answer questions on Northern Ireland and could not comment on an incident that led to a fatality there. Can you ensure, Mr. Speaker, that in future the Minister's officials supply him with the necessary information?

Mr. Speaker: It is not often that I defend Ministers, but I must defend this Minister. It must be pointed out that it was just before 10.30 am that I received the urgent question from the hon. Member for North Tayside (Pete Wishart). Of course, it was my decision to make sure that a Minister came to the House. There was even a question of which Department would answer the urgent question, because it affected Scotland and, indeed, Northern Ireland. I thank the Minister for coming to the House. Members must realise that briefing depends on the length of time or warning that is given. I feel that the Minister did very well indeed.

Tam Dalyell: On a point of order, Mr. Speaker. Have you had any representations from the Secretary of State for Defence following discussions with the Americans in which opinion was voiced about the possibility, all too serious in Washington, of the use of assassination squads in Iraq, perhaps operating across frontiers?

Mr. Speaker: The answer to that is no.

BILLS PRESENTED

Criminal law (amendment) (householder protection)

Patrick Mercer, supported by David Davis, Mr. Frank Field, Mr. Roger Gale, Chris Grayling, Mr. Dominic Grieve, Mr. Mike Hancock, Lady Hermon, Mr. Humfrey Malins, Mr. Mark Prisk, Mr. Hugo Swire and Dr. Richard Taylor, presented a Bill to amend section 3 of the Criminal Law Act 1967 in relation to the use of force in the prevention of crime or in the defence of persons or property: And the same was read the First time; and ordered to be read a Second time on Friday 4 February, and to be printed [Bill 20].

Drugs (sentencing and commission of inquiry)

Mr. Nigel Evans, supported by Mr. Nigel Jones, Jane Griffiths, Mr. Cheryl Gillan, Kate Hoey, Mrs. Angela Browning, Dr. Julian Lewis, Bob Spink, Mr. Robert Syms, Mr. David Amess, Mr. Andrew Rosindell and Mr. Julian Brazier presented a Bill to make provision about sentencing for persons guilty of an offence in connection with the supply or an offer to supply Class A drugs; and to establish a commission of inquiry into the effects and classification of cannabis: And the same was read the First time; and ordered to be read a Second time on Friday 25 February, and to be printed [Bill 21].

Health and safety (directors' duties)

Mr. Stephen Hepburn, supported by Vera Baird, Tony Baldry, Mr. Nicholas Brown, Mr. Michael Clapham, Mr. Tony Clarke, Ross Cranston, Mr. Frank Dobson, Mrs. Joan Humble, Helen Jackson, Mr. Michael Meacher and Dr. Jenny Tonge, presented aBill to impose duties upon company directors in relation to health and safety; to give powers to the Health and Safety Commission to issue and approve codes of practice in connection with the performance of those duties; to require large companies to appoint a director as health and safety information director; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 4 March, and to be printed [Bill 22].

Smoking in public places (Wales)

Julie Morgan, supported by Mr. Kevin Barron, Paul Flynn, Dr. Ian Gibson, Mr. Win Griffiths, Mr. David Hinchliffe, Dr. Doug Naysmith, David Taylor, Mrs. Betty Williams, Hywel Williams, Mr. Roger Williams and Sir George Young, presented a Bill to enable the National Assembly for Wales to prohibit or restrict the smoking of tobacco products by any person in a public place in Wales; to enable functions to be transferred to the National Assembly for Wales in that connection; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 18 March, and to be printed [Bill 23].

Stamp duty (lower rate for energy efficiency measures)

Mr. Kevin Barron, supported by Mr. Peter Ainsworth, Mr. Richard Allan, Mr. David Amess, Mr. John Battle, Mr. A. J. Beith, Sir Sidney Chapman, Mr. David Chaytor, Mr. David Drew, Mr. Neil Gerrard, Mr. Martin O'Neill and Brian White, presented a Bill to make provision for a lower rate of stamp duty land tax to be charged on residential properties where energy efficiency measures are undertaken by or on behalf of the purchaser: And the same was read the First time; and ordered to be read a Second time on Friday 8 April, and to be printed [Bill 24].

Mobile telephones (re-programming)

Mr. Kevan Jones, supported by Ms Dari Taylor, Mark Tami, Mr. Liam Byrne, Iain Wright, Jon Cruddas, Helen Jones, Ann McKechin, Mr. George Howarth, Mrs. Joan Humble, Mr. Stephen Pound and Mr. Frank Roy, presented a Bill to amend the Mobile Telephones (Re-programming) Act 2002: And the same was read the First time; and ordered to be read a Second time on Friday 15 April, and to be printed [Bill 25].

Sexual Offences Act 2003 (Amendment)

Sir Paul Beresford, supported by Vera Baird, Mr. Dominic Grieve, Mr. Humfrey Malins, Mr. John Randall, John Cryer and Mr. Neil Gerrard presented a Bill to amend the Sexual Offences Act 2003 to give the police powers to enter specified premises in order to ascertain whether a person subject to the notification requirements of Part 2 of that Act is residing at or staying on those premises and to search those premises for information relevant to section 67 of the Criminal Justice and Court Services Act 2000, and to create offences in connection with the exercise of those powers: And the same was read the First time; and ordered to be read a Second time on Friday 4 March, and to be printed [Bill 26].

Renewable heat

Mr. Michael Weir, supported by Hywel Williams, Annabelle Ewing, Pete Wishart, Mr. Andrew Stunell, Norman Baker, Paddy Tipping, Mr. David Chaytor, Brian White, Mr. Peter Ainsworth and Mr. Simon Thomas, presented a Bill to make provision to increase the proportion of heating fuel derived from renewable sources; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 4 February, and to be printed [Bill 27].

Employment tribunals (representation and assistance in discrimination proceedings)

Mr. Marsha Singh, supported by Peter Bottomley, Mr. Michael Clapham, Mrs. Ann Cryer, Mr. John Grogan, Mr. Fabian Hamilton, Mr. Mike Hancock, Mr. Eric Illsley, Mrs. Alice Mahon, Mr. Terry Rooney, Brian White and Mrs. Betty Williams, presented a Bill to make provision about representation of and assistance to complainants in discrimination proceedings before employment tribunals and the Employment Appeal Tribunal; to establish and confer functions upon the Tribunal Representation and Assistance Board; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 18 March, and to be printed [Bill 28].

Trespassers on land (liability for damage and eviction)

Mr. Gerald Howarth, supported by Mr. Philip Hammond, Dr. Julian Lewis, Mr. Mark Todd, Mr. Crispin Blunt, Mr. Nick Hawkins, Mr. Graham Allen, Mr. Humfrey Malins, Mr. James Arbuthnot and Sir George Young, presented a Bill to make a person liable for damage caused to land, or property on that land, on which he is trespassing with the purpose of residing there; to amend the Criminal Justice and Public Order Act 1994 in respect of the removal of trespassers from land, the seizure of property of trespassers and payments to occupiers of land in respect of damages arising from trespass; to establish a register of persons whose identity has been given to a constable after the giving of a direction under Part 5 of the Criminal Justice and Public Order Act 1994; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 8 April, and to be printed [Bill 29].

Telecommunications masts (planning control)

Mr. Andrew Stunell, supported by Mr. Richard Spring, Mr. Derek Wyatt, Mr. Phil Willis, Mr. Gary Streeter, Brian White, Mrs. Annette L. Brooke, Mr. John Bercow, Mr. Paul Truswell, Mrs. Patsy Calton, Mr. Mark Oaten and Mr. Paul Burstow, presented a Bill to amend the law relating to planning in connection with telecommunications masts and associated apparatus; to amend the electronic communications code in connection with telecommunications masts and associated apparatus and make further provision about that code; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 18 March, and to be printed [Bill 30].

Armed forces (parliamentary approval for participation in armed conflict)

Mr. Neil Gerrard, supported by Tony Wright, Mr. William Hague, Sir Menzies Campbell, Mr. Alex Salmond, Mr. Simon Thomas, Andrew Bennett, Mr. Gordon Prentice, Mr. Douglas Hogg, Mr. Richard Allan, Mr. Kelvin Hopkins and Brian White, presented a Bill to require parliamentary approval for the participation of Her Majesty's armed forces in armed conflict and for a declaration of war; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 4 March, and to be printed [Bill 31].

Human Tissue Act 2004 (Amendment)

Mr. Stephen Pound, supported by Dr. Evan Harris, David Cairns, Mrs. Gwyneth Dunwoody, Mr. Kelvin Hopkins, Mrs. Patsy Calton, Mr. Tam Dalyell, Chris Bryant, Lembit pik, Jane Griffiths, Siobhain McDonagh and Mr. Andrew Dismore, presented a Bill to amend the Human Tissue Act 2004 in relation to the removal of organs for the purpose of transplantation from adults who have died: And the same was read the First time; and ordered to be read a Second time on Friday 22 April, and to be printed [Bill 32].

Council tax benefit (entitlement information)

Tony Baldry, supported by Hugh Bayley, Dr. Hywel Francis, Mr. John Burnett, Dr. Evan Harris, Mr. Robert Jackson and Mr. John Bercow, presented a Bill to require billing authorities and local authorities to contact pensioners who may be entitled to council tax benefit: And the same was read the First time; and ordered to be read a Second time on Friday 4 February, and to be printed [Bill 33].

Humber bridge

Mr. Ian Cawsey, supported by Shona McIsaac, Mr. Austin Mitchell, Mr. Greg Knight, David Davis, Mr. Kevin McNamara, Mr. James Cran, Mr. Edward Leigh, Mr. John Grogan, Mr. Kevin Hughes, Mr. Phil Willis and Kevin Brennan, presented a Bill to amend the Humber Bridge Acts 1959 to 1973; to require the Secretary of State to review the exercise of his power under the Humber Bridge (Debts) Act 1996; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 15 April, and to be printed [Bill 34].

Local services and facilities

Mr. Roger Williams, supported by Andrew George, Sue Doughty, Mr. Simon Thomas, Mr. David Drew, Mr. Don Foster, Alan Simpson, Dr. Ian Gibson, Mr. Huw Edwards, Jim Dowd, Mr. David Chaytor and Matthew Green, presented a Bill to require public authorities to undertake a social and environmental impact assessment and to consult persons or bodies affected before closing premises that provide services or ceasing to provide services from particular premises; to amend the Town and Country Planning Act 1990 in relation to material changes in use affecting services to or amenities for the public; to confer powers on local authorities in connection with the proposed closure of leisure and sports facilities; to make provision about local food strategies; to make provision in connection with the delivery of beer to public houses from local breweries; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 25 February, and to be printed [Bill 35].

Succession to the Crown (no. 2)

Ann Taylor, supported by Joyce Quin, Paddy Tipping, Sandra Osborne, Mr. Mike Hall, Mr. Gwyn Prosser, Ms Candy Atherton, Tony Wright, Mr. Khalid Mahmood, Mrs. Betty Williams, Kali Mountford and Judy Mallaber, presented a Bill to make provision about succession to the Crown and about Royal marriages: And the same was read the First time; and ordered to be read a Second time on Friday 4 March, and to be printed [Bill 36].

School meals and nutrition

Geraint Davies, supported by Ms Debra Shipley, Ms Karen Buck, Ms Julia Drown, Dr. Howard Stoate, Harry Cohen, Ms Oona King, Siobhain McDonagh, Mrs. Janet Dean, John Austin and Julie Morgan, presented a Bill to make further provision about nutritional standards, and other nutritional requirements, for school meals; to regulate food vending machines in schools; to provide for restrictions on the whereabouts of pupils during school hours for the purpose of controlling the supply of food to them; to require the inclusion of information about nutritional standards of food in schools in reports of school inspections; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 25 February, and to be printed [Bill 37].

Estate agents (independent redress scheme)

Mr. Alan Williams, supported by Mr. Clive Betts, Andrew Bennett, Mr. Adrian Sanders, Mr. Kevin McNamara, Mr. David Clelland, John Barrett, Mr. Jon Owen Jones, and Claire Ward, presented a Bill to amend the Estate Agents Act 1979 to make provision for independent consumer redress in connection with the sale and purchase of residential property: And the same was read the First time; and ordered to be read a Second time on Friday 4 March, and to be printed [Bill 38].

Right of reply and press standards

Peter Bradley, supported by Mr. Clive Soley, Ann Clwyd, Tony Wright, Angela Eagle, Tony Worthington, Sir Sydney Chapman, Mr. Paul Tyler, Mr. Robert Walter, Martin Linton, Dr. Alan Whitehead and Mr. Sin Simon, presented a Bill to give persons a right of reply to correct factual inaccuracies in the press in specified circumstances; to establish and confer functions upon the Press Standards Board and the Press Standards Adjudicator; to create an offence in connection with non-compliance with an enforcement notice served by the Press Standards Board; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 25 February, and to be printed [Bill 39].

John Bercow: On a point of order, Mr. Speaker. I seek your guidance on a matter of grave international significance. Right hon. and hon. Members will be aware, as you will be, of the prevalence of press reports that show that the African Union force is failing to prevent the mass murder of civilians in Darfur. In light of that fact and of the spread of violence into the camps for internally displaced persons, is it not important that a statement should be made to the House at the earliest opportunity as to whether the Government intend to press for action on the part of the international community to bring the appalling regime in Sudan to heel, in the name of protecting people whose lives are being lost on a daily basis and upon an horrific scale?

Mr. Speaker: I am deeply saddened to hear this news from the hon. Gentleman. I have no powers on this matter, but Ministers will read Hansard and see what he has said.

Orders of the Day
	  
	Child Benefit Bill

Order for Second Reading read.

Dawn Primarolo: I beg to move, That the Bill be now read a Second time.
	The Bill is a short and straightforward measure consisting of seven clauses. None the less, it is a significant milestone in the Government's commitment to removing the financial barriers to young people staying in education or training after the age of 16, helping them to gain the skills and qualifications that they need to succeed in the modern global economy.
	I would like to start by thanking the many organisations that have contributed to our consultation on the Government's review of financial support for 16 to 19-year-olds. Their views and evidence have been invaluable in informing the development of our proposals, including this Bill, which is an important first step. We have also been keen to involve young people and parents directly in the policy making that affects them.
	Last September, I took part in a consultation event with young people organised by the National Council for Voluntary Youth Services. I was very impressed by the dedication and insightful comments of the young people whom I met. Their ideas and suggestions are now shaping the future of financial support for 16 to 19-year-olds. Indeed, Centrepoint arranged for me to have a very long meeting with a number of young people, who again demonstrated at every point their sensitivities, understanding and determination to have access to education and training to better their opportunities in adult life.
	In short, the Bill will enable the Government to lay regulations extending child benefit to new groups of learners aged 16 and over. The House may find it helpful if I explain briefly the background of the steps leading up to the Bill so that hon. Members are able to understand its purpose in the context of the Government's skills agenda and our overriding commitment to build a strong economy and a fair society in which there are opportunities for all.
	The Government's stable macro-economic framework has already contributed to lower levels of unemployment and record levels of employment. However, we know that to continue to thrive in the modern global economy and to deliver social justice to allbecoming both a fairer and more prosperous societywe need to improve the skills and fulfil the potential of all our young people and adults. Skills help our businesses and public services to achieve greater efficiency, innovation and excellence and they help individuals to gain employment opportunities and achieve their ambitions for themselves, their families and their communities.
	We all know that skills matter, but we also know that the United Kingdom educational system has unfortunately suffered from historical underachievement. Although we perform strongly in higher education and have a large number of highly skilled workers compared with other countries, the historic failure to invest in training and education until recently has led to major shortfalls in terms of the intermediate skills that we need to secure sustainable employment and opportunities for all. As a result, far too many young people and adults are prevented by their lack of skills from getting secure, well-paid jobs and all the social and personal benefits that go with them.
	About 7.8 million working-age people in the United Kingdom do not have the level 2 qualificationsthe equivalent of five GCSE A to C gradesthat are needed as a foundation for many careers. This failure is particularly apparent when we compare ourselves with our key competitors. Some 33 per cent. of the United Kingdom work force have low skills compared with 19 per cent. in Germany and 15 per cent. in the United States. In fact, we have the highest proportion of unskilled workers in any major European Union country.
	In the Chancellor of the Exchequer's pre-Budget report statement, he set out the steps that the Government are taking to close Britain's skills gap. Part of this strategy involves ensuring that every adult who has missed out at school will have the funds and the opportunity through time off work, free training and help from employers to acquire skills, starting with a first level 2 qualification. Our commitment to deliver that was underlined by the announcements to roll out the national employer training programme and a pilot of a new learning allowance for benefit claimants, building on the success of the new deal for skills launched in the Budget of 2004.
	The Government know, however, that these measures are not enough on their own. In order to secure greater productivity, flexibility and fairness in the United Kingdom economy in the long term, we know that we must ensure that, in future, all young people reach adulthood equipped with the skills that they need to succeed in the economy. Too many adults fail to reach their potential when young. Despite significant increases in the number of young people participating in education and training after the age of 16, a quarter of 15 to 19-year-olds are still not in formal education.
	The United Kingdom compares unfavourably in this regard internationally. We currently lie 25th out of the 30 Organisation for Economic Co-operation and Development countries for participation in education at the age of 17. This situation did not occur overnightit is the result of years and decades of failure to invest in educationand it cannot be put right overnight. However, the Government are committed to increasing the flow of skills into the labour market by ensuring that all young people can reach the age of 19 ready for skilled employment or higher education. Our long-term ambition is that by 2015, United Kingdom staying-on rates after 16 will move from one of the lowest in the OECD to one of the highest. Since 1997, we have been putting in place the effective strategy to achieve this ambition, taking an holistic approach that brings together three different areas of policy with the aim of setting clear expectations for all young people that they should continue in learning beyond 16whether in school, college or the workplace.
	First, we are reforming the curriculum structure for young people in England to provide more coherence, choice and flexibility, including by raising the quality and profile of the vocational route. Much has already been done to improve the quality and quantity of training places. With the expansion and reform of the apprenticeship programme, we are now able to offer a ladder of opportunity from basic to advanced skill levels.
	A record number of young people are currently engaged in Government-supported training, with more than 250,000 in England alone gaining skills, experience and qualifications in thousands of businesses. The Government have welcomed the proposals of the working group on 14 to 19 reform, which was led by Mike Tomlinson and recommended the development of a single curriculum structure with the aim of giving academic and vocational qualifications greater parity. We will shortly set out our detailed response to those proposals in the form of a White Paper.
	Our second strand of policy is designed to underpin those curriculum reforms by strengthening the advice, guidance and support offered to young people to ensure that they are able to make informed choices about the range of learning options and opportunities that are now available to them. Connexions partnerships and the devolved careers services are playing a vital role in that area and reducing the number of young people outside work, training and education. I pay tribute to the Under-Secretary of State for Education and Skills, my hon. Friend the Member for Bury, South (Mr. Lewis), for working tirelessly in his Department to bring those benefits to our young people.

John Bercow: Much of what the Paymaster General has said has been unexceptionable and I acknowledge that there is a good deal to be said for the Bill. However, she used the term missed out in relation to people who did not get what they should have had, or had hoped to receive, at school, and for whom provision must be made thereafter. I am not making a partisan point, because this a matter of great national concern, but does she know why the proportion of companies in recent business surveys saying that the three R's are not good enough and that we must provide remedial training is going up, not down?

Dawn Primarolo: The hon. Gentleman follows such subjects closely, so he will know that we must also have a strategy on literacy, numeracy and developing skills in our primary schools, as we do. By putting the Bill in such a context, I was trying to demonstrate to the House that we are addressing the problem by raising standards and developing basic skills in primary schools and through curriculum change in secondary schools. The Bill and other proposals are designed to remove financial barriers and distortions that force young people to take options that are perhaps not right for them, but are the only ones availablesome have no options at all. Our measures go all the way through to the announcement in the pre-Budget report of an adult skills agenda. I agree with the hon. Gentleman that there is not a single answer. The most important thing that we must engender is the value of education and the opportunities that that can give to young people, so early years provision, primary and secondary schools, training opportunities and higher and further education must all reinforce that.

Tony Baldry: The Paymaster General said that there must be informed choices, and I am genuinely asking for information. Who is responsible for ensuring that youngsters have the information that enables them to make choices? Will there be an opportunity for each pupil to have an interview with Connexions or other people at a specific stage of their school career? There is an understandable tendency for schools to try to persuade everyone to stay on as long as possible because of capitation rates and weighting, so we would benefit from knowing who will ensure that an informed choice is made.

Dawn Primarolo: The hon. Gentleman is right to pinpoint the fact that informed choice is necessary as one of the pressure points. Connexions plays a crucial role, but that must be enhanced and developed. I know that my hon. Friend the Under-Secretary is working on that, and the youth Green Paper will need to build on it. The hon. Gentleman rightly points out not only that opportunities must be available, but that young people must know that they are available and be able to decide which are most appropriate so that they can build on their potential.

Judy Mallaber: Following on from the discussion initiated by the hon. Member for Buckingham (Mr. Bercow), I can add that Amber Valley has an incredibly positive programme running from early years through to a 16-to-19 programme for those who are not in education, employment, or training at that age. We also have a sports development programme, to re-engage children from an early age right through. How restrictive will the criteria for who will qualify for the different types of training and the courses be? I want to ensure that the 16-to-19 programme, which might not necessarily lead to a formal qualification, but is very successful, will fall within the parameters of the Bill.

Dawn Primarolo: The main criterion must be entry to employment. The hon. Member for Buckingham (Mr. Bercow) talked about doing the basics, and I told him about the primary school programme. Of course, any child who has benefited from the primary school reforms that the Government have already undertaken has not yet left school. We are intervening in the system at every level, especially to address the quality of action.

Judy Mallaber: rose

Dawn Primarolo: Will my hon. Friend allow me to make a little progress because I shall talk about access to training later in my speech? If I do not address her point then, I shall be more than happy to give way again.

Jonathan R Shaw: I would like to follow up the point made by the hon. Member for Banbury (Tony Baldry). The learning and skills council, the Connexions service and the local education authority in my area have organised the offer of post-16 education and training as part of the strategic area review. Does my right hon. Friend agree that it is vital that information about that, and the benefits available to all young people, is disseminated? Similar areas have different rates of success, so will she and the Department for Education and Skills examine best practice in increasing in the use of post-16 provision? This is a matter of national importance, so we must keep a microscope on what is happening locally.

Dawn Primarolo: I agree with my hon. Friend, who is a distinguished member of the Education and Skills Committee. The review of financial support for 16 to 19-year-olds that was jointly organised by the Department for Education and Skills, the Department for Work and Pensions and the Treasury examined the quality of advice and support available to young people. Young people whom I met, and those who contributed to the review but whom I was unable to meet, said that that was a high priority, because many had found out that they could have received advice, support or guidance only when it was too late.
	The third and final element of our strategy is removing the financial barriers to young people staying in education and training after 16. The Chancellor announced in the 2003 Budget that the Government would review financial support for 16 to 19-year-olds with the aim of delivering an accessible system of support, and incentives to reduce the appeal of a job at the age of 16 compared with that of the route of learning, which pays far more in the long run.
	The review sought to build on the success of the education maintenance allowance pilots, which have already demonstrated how important financial incentives are to encourage young people to stay in learning. The evaluations of the pilots found that the education maintenance allowance was projected to have the biggest impact on post-16 participation levels since the introduction of GCSEs in 1987.

Sally Keeble: Will my right hon. Friend give way?

Dawn Primarolo: I will give way once more, and then I must make progress. I tried the patience of the House too long in a previous debate by giving way more than I should have done.

Sally Keeble: Is my right hon. Friend aware of the skills shortage in areas such as mine, and the importance of measures to ensure that young people stay on at school and are encouraged to undertake the type of training that will provide the skills necessary to meet that shortage in Northampton? That will relieve the heartache experienced particularly by lone parents who have difficulty in supporting their children.

Dawn Primarolo: I agree with my hon. Friend. My hon. Friend the Economic Secretary will visit her constituency and others in the area early next month and will have detailed discussions on a number of issues, in particular the role of employers in connection with access to quality training and the removal of barriers facing young people, whatever their background. That is crucial.
	The Government's decision to roll out the education maintenance allowance nationally from September 2004 is increasing Government funding for 16-to-19 education by 10 per cent., and demonstrates our commitment to realising the potential of all our young people. The EMA is paid direct to the young person who has decided to stay on at school or college, on top of the financial support already available to their parents or carers through child benefit and child tax credit. It is a bold initiative that only pays something for something, making young people aware of their responsibility in committing themselves to learning and development.
	The review of financial support for 16 to 19-year-olds sought ways in which these principles could be extended to other young people, including those continuing their learning after 16 outside school or college. We published the resulting report, Supporting young people to achieve, alongside the Budget last year. The evidence collected during the review clearly indicated that the complexity and anomalies in the current system of financial support create major barriers to learning for many young people, especiallyunfortunately the most vulnerable. To remove those obstacles, the review proposed a long-term vision of a radically simplified model of financial support designed to support young people's post-16 choices and transitions, ensuring decent minimum income levels and improved accessibility.
	The vision builds on the successful model of support already in place for the two thirds of 16 to 18-year-olds who stay on in full-time education and live at home. As I explained earlier, that involves a combination of financial support paid to the parents or carers in the form of child benefit and child tax credit, and a financial incentive paid directly to the young person in the form of the education maintenance allowance. Our intention is to extend this model of support and incentives to more marginalised groups of young people in order to encourage them to participate in learning. Our extensive consultation with young people, parents, voluntary sector organisations, businesses and learning providers indicated that there is strong support for this approach.

Jonathan R Shaw: Will my right hon. Friend give way?

Dawn Primarolo: If my hon. Friend will forgive me, I shall make a little more progress before giving way to him again.
	In Supporting young people to achieve we set out a package of short-term measures to improve the delivery of benefits to young people, together with some interim steps towards our long-term vision of a single coherent system of financial support for 16 to 19-year-olds. At the centre of those are two proposals to extend child benefit, child tax credit and education maintenance allowance to unwaged trainees, and to extend financial support until young people finish their course, rather than stopping it on their 19th birthday. The Bill is an essential step in implementing those proposals.
	The current disparity in the financial support available for full-time education and unwaged training is one of the worst distortions identified by the review. A young person aged 16 to 18 is eligible for child benefit and child tax credit if they stay in full-time education at school or college, but not if they enter one of the unwaged work-based training programmes arranged by the Government to help trainees progress to paid apprenticeships. This differential treatment can distort choices for young people, particularly for the most vulnerable.
	Together, child benefit and child tax credit constitute an important stream of income for a young person's family, and the loss of that money may mean that some low-income parents are no longer able to support their child in education. I am sure many hon. Members have received, as I have, letters from constituents who are desperate to keep their son or daughter in training on a course, but who cannot do so because the child benefit and child tax credit have stopped. The young person may have only six months left to complete their NVQ level 2, but everything is destroyed or lost because of the financial pressure on the family. That cannot be right. The Bill provides for arrangements to be put in place to prevent that from happening.

Judy Mallaber: With which institutions, organisations, employers and so on would a trainee placement be eligible for such support? If I give my right hon. Friend the details, will she examine my local sports development programme, which enables some of the participants to access further trainingfor example, to become sports coaches?

Dawn Primarolo: The schemes eligible will be the formally sponsored Government projects and schemes. I do not recollect whether the one that my hon. Friend mentions is among them, but I am more than happy for her to send me the details and I will certainly consider them.

David Laws: How many of the 80,000 young people who are unwaged trainees will be covered by the welcome new rules extending child benefit and child tax credit?

Dawn Primarolo: I do not have the figure to hand, but I will ensure that it is made available to the hon. Gentleman.
	The longer-term vision is for a coherent system of financial support. Other Government measures will need to reflect that. For example, much work is being done to determine whether volunteering as a way of acquiring a skill could be included in the scheme in the long run, although that is not covered by the Bill. As far as I am aware, all 80,000 unwaged trainees mentioned by the hon. Gentleman would be eligible for the scheme. There is no question of some being in and some being out.

John Bercow: Will the right hon. Lady give way?

Dawn Primarolo: Yes, but this really will be the last time. Many hon. Members want to speak, and I do not think that I have been strict enough.

John Bercow: I am grateful; the Paymaster General's generosity is exemplary. The Bill is short, but I hope that she will understand when I say that my brow furrowed when she referred to the regulations that are to come. Will they be subject to the negative procedure of the House, or to its affirmative counterpart?

Dawn Primarolo: The hon. Gentleman may not have had an opportunity to obtain a copy of the draft regulations that were made available at the beginning of the week to assist hon. Members in the debate, and which I am sure will answer many questions that he might have. The regulations will be subject to the negative procedure, as with all other regulations in this category.

John Bercow: I had better go and get a copy.

Dawn Primarolo: That would be an extremely good idea. Perhaps the hon. Gentleman should read the regulations before he makes any further comments.
	The Government believe that young people should be able to choose the learning route most appropriate for them, rather than basing their decision on the amount of financial support available. The Child Benefit Bill is therefore important, because it is the first step in removing the distinction between education and unwaged training with regard to child benefit and tax benefits. Corresponding amendments will also be made to income support and other benefits to ensure that unwaged trainees who cannot live in the family home also benefit from the new arrangements. Those changes will strengthen young people's choices between the academic and vocational learning routes, and are very much in line with the proposals of the working group on 14-to-19 curriculum reform. They will bring about additional investment in financial support for unwaged trainees of around 100 million a year, delivering more money for tens of thousands of young learners, especially those from low-income families and those who are unable to live in the family home.
	The Bill will also enable us to remove another damaging anomaly in the financial support system identified by the reviewthe cut-off at the age of 19, to which I have already referred. Child benefit rules are based on the assumption that post-16 participation comprises two years of A-level study at school or college, completed before the young person's 19th birthday. But this model of post-16 education does not match the pathways and experiences of many young people continuing in learning today. Each year thousands of young people reach the age of 19 while still studying for non-advanced qualifications. Most of these young people will be in this situation because their education has been disrupted for some reason, including vulnerable groups such as care leavers, young offenders and those who are homeless and have been estranged from their family.
	Under the current rules, child benefit and tax credits cease on the young person's 19th birthday, irrespective of whether they are still studying. Young people from low-income households may be forced to leave their course before achieving their qualification, and that cannot be right. The situation is even worse for young people who cannot live in the family home, as their entitlement to income support may cease and they must instead claim jobseeker's allowance, which by requiring them to be available for work stops them from studying full-time. The loss of income support also triggers the loss of housing benefit, often making it impossible for them to continue on their course without losing their home or running up rent arrears.
	The personal testimonies that we received during the review revealed the distress and frustration caused by these rules. The young people affected had overcome previous obstacles to engage in education, but then at 19 faced severe hardship and debt if they wanted to complete their course. There was a real sense among the respondents that although they were seeking extended support in the short term, in the long term they would contribute much more to society if they completed their studies.
	It is a wasted investment both for the Government and for the young people if they drop out before achieving their qualifications. This is why we propose to reform the rules for child benefit, child tax credit and income support, so that young people who reach 19 while still studying for non-advanced qualifications are supported until they complete their course. The Government are committed to ensuring that all young people are supported to achieve their potential.

Andrew Tyrie: Will the Paymaster General give way on that point?

Dawn Primarolo: I said that I would not give way again. I have now been speaking for a long time, and the hon. Gentleman is about to make his own speech. I am sure that he will be able to make his point then, and my hon. Friend the Economic Secretary will be able to reply. Forgive me, but I have tried the patience of the House too much again.
	Having set out the context and background to the Bill, I want to explain briefly its provisions and how these will be used to achieve the reforms. The Bill will restructure the existing definition of a child in child benefit by introducing a new concept of a qualifying young person. A child will be defined as a person who has not reached the age of 16, which I can reassure hon. Members means that the Bill will have no impact on the payment of child benefit for under-16s. The Bill enables the Government to lay regulations prescribing the circumstances in which someone aged 16 and over is defined as a qualifying young person. That replicates the approach already used in the legislation for the child tax credit, ensuring greater consistency in the criteria for the two streams of support.
	As I announced in my written statement to the House, we published draft regulations on 10 January to demonstrate how we intend to use the powers provided by the Bill. In addition to the existing entitlement for 16 to 18-year-olds in full-time education, the regulations show how we propose to extend support to unwaged trainees on specific training programmes arranged by the Government. The regulations also confirm that we will extend support to 19-year-olds until they complete their course, up to an age limit of 20. We intend to implement both the reforms in April 2006, along with the corresponding changes to the child tax credit and income support, which will be made via separate amending regulations.
	The April 2006 launch date will represent a major milestone on the way to our long-term vision of a radically simplified system of financial support for young people in learning. It is worth pointing out that one of the benefits of using regulations to define eligibility for child benefit for 16 to 19-year-olds is that it provides us with greater flexibility to respond readily to the long-term curriculum changes and policy developments. This change has been too long in the making. Regulations enable us to respond more speedily. We must ensure that the financial support system reflects the diverse range of learning opportunities available to young people today and in the future.
	We know there are innumerable barriers to education and training for all those over 16 years of age. Financial support should not be one of them. The Bill starts the process of ensuring that it is not, and I commend it to the House.

Andrew Tyrie: I have a couple of quick points to make at the start. First, the Opposition will not oppose the Bill this evening. Secondly, I just want to say how grateful I am for the responses that I have received from a number of organisations to my request for their views on the Bill, in particular, Barnardo's, Connexions, the Foyer Federation and the Prince's Trust. Some of what I will say today reflects points that they have made to me, and no doubt my hon. Friend the Member for Rayleigh (Mr. Francois) will raise others in Committee. The hon. Member for Amber Valley (Judy Mallaber), who is just leaving the Chamber, also raised some of the points that they have made. I did not mean to embarrass her; I meant to compliment her. The eligibility rules point to which she referred features in several of the representations that I have received.
	I intend to make three general points. First, with only seven clauses and a couple of schedules, this is a small and relatively straightforward Bill, even taking into account the regulations and changes to the tax credits system that will accompany it. However, it raises a number of detailed and important questions that I shall deal with in a moment. I am afraid that that will probably be the most boring part of my speech for some hon. Members who are not so interested in the detail. [Hon. Members: No!] I am pleased to have such a ready audience for such material.
	Secondly, the existing system of support is getting incredibly complicated. It is unacceptably complicated and reflects what is going on in the benefits system more widely. I worry that the Government do not have a clear idea of their destination in some of the reforms, despite what the Paymaster General said, and that the Bill will not help us get there anyway. I shall deal with that point in a moment.
	The third point derives from the fact that a relatively senior member of the Treasury team is presenting the Bill to the House. Does it really make for good government that the Treasury has become a benefits agency? Is it sensible that gamekeepers have become poachers? How on earth has all that happened? I shall get into that issue at the end of my speech.
	We need first to do a bit of detailed analysis of the Bill. The Paymaster General rightly ranged widely in setting out the reasons for the Bill, and I shall not repeat that background. The Bill is part of a much broader reform, and as she said, there will probably be more in the Budget. There will also be a White Paper, as she mentioned. The Bill is designed to make only a couple of simple amendments to the eligibility rulesone affecting unwaged trainees and the other dealing with people over 19 who are on courses.
	On the first change, as the Paymaster General said, the idea is to remove the apparent discouragement in the current system for people in training. A number of them choose to stay in full-time education because the financial support is better, even though they may be better suited to training. That is one of the concerns that have been expressed to me. The other aim is to help people stay on after their 19th birthday. At present, payments stop as soon as they reach that point.
	The provisions on unwaged trainees look uncomplicated, although it should be remembered that the eligibility criteria for child benefit affect a number of other benefits, so the Bill has had to introduce amendments in respect of the widowed mothers allowance, the widowed parents allowance and the guardians allowance, among other payments. It is claimed that the Bill will remove distortions. I am not convinced that they will all be removed, although I shall perhaps save the detailI have some of it herefor the Committee stage.
	The entitlement of parents and carers to child benefit and the child tax credit currently stops at the 19th birthday, and the Government want people to be able to go on receiving the benefit while they are doing an appropriate course. As I have made clear, the Opposition will not oppose that proposal.
	It is importantthe hon. Member for Yeovil (Mr. Laws) began to get into this territory a moment agothat we look at what impact the measures will have. In that regard, we have to rely on the regulatory impact assessments. I use the word assessments because we have already had two of them. First, an assessment was published in December. Frankly, it was so thin that I was surprised that the Paymaster General allowed it to get out of the Treasury at all. Secondly, a couple of days ago, we were given an assessment called the Supplementary Partial Regulatory Impact Assessment. It is pretty partial and thin. It is a welcome supplement, but even when the assessments are taken together, we still have a pretty thin gruel.
	Yet again, the Government have introduced a measure in quite a major spending area and we still do not have a proper regulatory impact assessment. The language of regulatory impact assessments is used, but the substance is not delivered. That is extremely worrying, and it probably explains the fact that so much money is being wasted in some areas of the public sector.

Rob Marris: I have read both the documents to which the hon. Gentleman refers. As he said, the Bill seems a fairly simple measure, even though it will cost 105 million a year. What is he saying is missing from the regulatory impact assessments? Is he saying that he wants more complex assessments when in fact we do not need them?

Andrew Tyrie: If the hon. Gentleman will contain himself for a moment, I shall ask a few questions of the Paymaster General. If he wants to come back with the answers because he already knows them, I shall be delighted to take a second intervention.
	At the heart of the matter is the fact that we do not know what the cost or effects of the measures will be. We do not know what the behavioural effects or deadweight costs will be; how many people will be brought into, attracted to or kept in training; or what the consequences would be if the measures were not introduced. The most basic question is: how many extra people will benefit and what is the extra cost over and above the amount that will have to be paid to those who would go into training anyway? We need to compare those two numbers to decide whether to proceed with the measure. That is not an easy question.

Rob Marris: In paragraph 10 of the supplementary partial regulatory impact assessment, which I think was published on Monday, the final words are 105m a year, referring to costs in relation to the 80,000 young people mentioned in the first line of that paragraph. As I understand it, the benefit is non-means-tested. If double the number of young people went on to unwaged training courses and the figure was 160,000, the costs would presumably be 210 million a year. Surely, that is the hon. Gentleman's answer.

Andrew Tyrie: I am grateful to the hon. Gentleman for illustrating what I am trying to say. If he reads the paragraph carefully, he will see that it refers to
	trainees in all programmes of Government Supported Training,
	as well as to child tax credit. We need a breakdown between those two aspects and to know what proportion would be spent on people who had not changed their behaviour in any way as a consequence of the measures. There is a deadweight cost. What we need to know in order to make a proper assessment and what the core of any regulatory impact assessment should be is how many extra people will be involved and the extra take-up that will result from the measure. That information is not provided in the document. Indeed, no attempt at all has been made to provide it. How many extra people will be trained? That is what we need to know, and I see that he nods in agreement.
	We are not even absolutely sure about the straight-line costthe point that I made in the beginning of my response to the hon. Gentleman. On reading carefully paragraphs 8 to 10 of the regulatory impact assessment, I see no breakdown of the 105 million between the cost of child tax credit, child benefit and income support. I may have misread the document, and perhaps he knows that information. I do not have it, and as the Paymaster General is not leaping to her feet to tell me, I fear that she does not know either, even though she is introducing the measure. In order to assess the value of such a measure, it seems absolutely basic that we must know that information, and we do not.
	Let us turn to the age 19 cut-off and see how far we get in trying to work out what the regulatory impact assessment has to say about that. The Government have changed their mind on this issue. I thought that they were proposing a cut-off at the 21st birthday, but it seems that that the age has now changed to 20, only one extra year. Incidentally, they say that they are doing so because they have some concerns about behavioural effects, a point made in paragraph 23 of the regulatory impact assessment, but the cost, which is put at 65 million, does not take account of behavioural effects, which seems extraordinary. We have been given a cost estimate, which we have been told by implication immediately to ignore. If we do not ignore the cost estimate, there is little logic in excluding 20-year-olds. We have been told that lifting the age from 19 to 20 will cost 65 million, but raising it to 21 will cost only 10 million more. If the cost tails off that dramatically, why have the Government rejected raising the age limit a little further?
	The Paymaster General referred to representations, and a number of relevant organisations have made representations that people will still be caught at the cut-off at 21. She could consider raising the cut-off to 22, bearing it in mind that the cost tails off so quickly. She may want to consider that option, but we have not been provided with the information to assess it. I would be grateful if she told me the Government's estimate, which must be extremely small, of the cost of bringing help to people aged 21?
	I realise that the Paymaster General may not have all the answers on the tip of her tongueI see that reinforcements are now arrivingand she may want to reply in a letter or in Committee, because it is important that those questions are answered. I have no illusions that they are easy, but they are relevant, and I hope that the Paymaster General and the Economic Secretary asked them vigorously of officials before they agreed to go ahead with the proposals.
	At one point, the partial regulatory impact assessment states that it relies on anecdotal evidence. If that is the case, the Government should consider conducting a sampling survey. They have held a pilot; why not conduct a sampling survey on the points that I have just raised? Such a survey would not cost much and would enable the Government to answer the crucial question whether we are getting value for money for those proposals. We do not have evidence in front of us showing that we are getting value for money for the 170 million that will be spent as a consequence of the Bill.
	I shall say a few words about complexity, which is my second major point, but I shall do my best not to detain hon. Members for too long. At the beginning of my speech, I said that complexity is a serious problem, and the tax credit and benefit system is now so complicated that scarcely anybody fully understands it. I am not suggesting that all the problems began in 1997, when the system was already complicated, but reforms since then have not made the situation any easier. As a result of recent reforms, seven benefits are specifically available to families with childrenchild benefit, child tax credit, working tax credit, statutory maternity pay, maternity allowance, guardians allowance and education maintenance allowance.
	Three separate Departments are responsible for policy: the Treasury rules the roost on child benefit and child tax credit; the Department for Work and Pensions examines most other benefit issues; and the Department for Education and Skills runs the education maintenance allowance. That is not a good way in which to make benefit policy. The Bill originates in a review conducted by all those Departments, called Supporting young people to achieve: towards a new deal for skills, which was published in March last year.
	In truth, support for young people is, of course, horrendously complicated. The Government make that clear on page 16 of the document, which includes a chart that would leave even someone who is well versed in such matters bewildered as to their entitlement. The system is far too difficult to understand: I do not think that there is a family in the country who could successfully navigate its way through the thicket of regulations and rules, and I am not sure how many hon. Members could, either.
	I was shocked to learn that the people who are supposed to administer the system and provide expert help do not seem to have a firm grip. Lest hon. Members think that I am exaggerating, I shall quote from the Government's own document, which states:
	several young people who contributed to the Review had received poor and inconsistent advice.
	The Paymaster General referred to that point, which is obviously a major concern. To their credit, the Government have acknowledged that there is a crisis as a result of the paucity of advice. The social exclusion unit report, Bridging the Gap, also makes that point clear.
	The Bill does nothing to address those problems. To solve them, we must rely on what Supporting young people to achieve: towards a new deal for skills describes as
	a radical simplification of financial support,
	which the Paymaster General referred to earlier and which will occur at some unspecified future date. The detail on how that will be accomplished consists of little more than a table on page 35, which is worthy in itself but is scarcely the stuff of serious policy making. I will believe in the simplification when I see it.
	In the meantime, the DFES and the DWP will work in consultation with the voluntary sector to try to ensure that young people at least get better help and advice in understanding their entitlements. That is, of course, welcome, but sophisticated advice centres to explain people's benefit entitlements are not a solution but a reflection of the problem. Young people most need advice not on the benefits system but on what courses to take and on the crucial questions that will affect their lives, as my hon. Friend the Member for Banbury (Tony Baldry) pointed out in his intervention.
	I have made it clear that we will not oppose the Bill, but I regret yet further layers of complication being added to child benefit. When child benefit was introduced, its great advantage was that it was simple: it was a universal benefit paid regardless of income, and it had almost 100 per cent. take-up. It could therefore play a role in relieving poverty, particularly at the bottom end, where people often suffer the most by missing out on benefits designed for them. Because it was a universal benefit, it did not have severe disincentive effects.
	The tax and benefits system is now being constructed on an ad hoc basis, and it is far more complex. It creates more disincentive effects, often has unacceptably low take-up and often fails to help those who most need it. Anybody who reads the recent National Audit Office report on tax credits will find plenty of evidence for what I have just suggested. The new tax credits, including child tax credit, have not worked as intended, causing problems for claimants, employers and the Government, and they are extremely complicated.
	A moment ago, I said that child benefit was originally a simple benefit for a simple purpose; it is now a much less simple benefit for multiple purposes. The Government see it as a tool to encourage more people to choose unwaged, work-based training, if that is their preference, instead of paid work-based training. It is seen as one of the tools needed to tackle the skills shortage and as part of the education system. This Bill, its accompanying regulations and the raft of measures that are likely to be announced shortly are no doubt well intentioned, but will they have the effects intended? I am not sure.
	A Dutch economist, Jan Tinbergen, won a Nobel prize by making this simple point: use one social policy for each policy objective. The Government have located a problem, a skills shortage, which is what, Supporting young people to achieve: towards a new deal for skills is all about, and they have decided to use multiple policy instruments to tackle it.
	My best guess, and my worst fear, is that the law of unintended consequences will apply, although I shall not try to predict how. If the Government were to get the chance to implement more legislation after the election, I would wager that before long they would have to return with yet another raft of measures to tackle the unintended consequences of the last set. There are so many examples of that having already happened with the Government's reforms that I hardly know where to begin. Perhaps, as I have already been speaking for a while, I will confine myself to three.
	First, there were the individual learning accounts. Remember those? They were an early attempt by the Government to address the skills agenda, but they had to be abandoned because they generated so much fraud. Then there is the pension credit, a flagship policy introduced as recently as October 2003, but just over a year later we have had a number of press reports suggesting that it is to be scrapped. There are also the new tax credits to which I alluded. Those were presented as a light-touch system, responsive to the needs of families, but the overpayments problem seems to be growing all the time, and we do not yet know the full extent of it.
	The plain fact is that this Chancellor cannot resist meddling. He is a spending Minister struggling to get out. He sometimes reminds me of an earnest professor of social engineering, with his incessant tweaking and adjusting of his own creation. We only have to look at the history of tax credits to see that. In the space of four years, this Chancellor has abolished family credit and introduced the working families tax credit.

Rob Marris: Very generous.

Andrew Tyrie: He has introduced the child care tax credit and the disabled person's tax credit.

Rob Marris: Hear, hear.

Andrew Tyrie: He has introduced the employment credit, the children's tax credit and the baby tax credit.

Rob Marris: Hear, hear.

Andrew Tyrie: The Chancellor has abolishedand I do not know whether I will get more Hear, hearsthe working families tax credit, the disabled person's tax credit, the children's tax credit and the baby tax credit. He has also abolished the employment tax credit and introduced the working tax credit. The results are predictable: low take-up, confusion and complexity. Those are the unintended consequences of a system in which fraud and error are rife and many people do not get the support to which they are entitled and which they deserve.
	That brings me to my third and final point, which is about the Treasury as a spending Department. After all, most of what I have just described is a direct consequence of the Treasury's having started to meddle in this area. How on earth can it be that the Prime Minister has allowed a Chancellor to turn the Treasury into a spending Department? How on earth is it that the only gamekeeper that we have in Whitehall is now on the loose as a poacher? The answer comes in one word: Granita.
	The truth is that just over a decade ago, in an Islington restaurant, the then Leader of the Opposition, now the Prime Minister, promised his shadow Chancellor that if they won the election he would have a free run of the fairness agendasocial justice, employment opportunities and skills. As a result, we have Treasury measures such as this, and the DWP, which is just about the only repository of wisdom in Whitehall about how to run a benefits system, lost half its remit. It is scarcely any wonder that there has been such chaos in the take-up of benefits. The Inland Revenue was never geared to run a benefits system; its job was to get the tax in. In the long run, neither the making nor the running of policy in this way is sustainable.

Liam Byrne: I hate to puncture this entertaining narrative, but has not the effect of the changes introduced by the Chancellor been to end the growth of income inequality which so scarred the country under the last Conservative Administration?

Andrew Tyrie: That is a very broad question, but it is a fact that in the past seven years the number of those at the bottom end who are most in needthe so-called million who miss out on education and traininghas increased from a little under a million to well over a million. The indicators point in several directions, and the picture is certainly unclear. What is more, that change took place at a time when the economy has been growing very strongly and unprecedented sums have been thrown at these problems. Never has so much money been spent, with so many good intentions, to so little effect.
	As I said a moment ago, that is no way to run a Government. I have noticed that a number of new Labour's keenest, innermost, kitchen cabinet-type supporters have started to say the same. What does John Birt's proposal to extract the spending Departments from the Treasury and place them in the Cabinet Office really mean? It is about recreating something that was lost when the Treasury became a spending Department. It is about recreating a workable system of public expenditure control and review. That is what we desperately need in Whitehall now. Of course, it is also about trying to wrench back some control for the Prime Minister over the empire-building of his neighbour in No. 11.
	If one wants to know the real origin of this child benefit proposal and the whole of the Treasury-driven skills agenda, one finds it in Granita. It is not all good and it is not all bad, but it lies there. The Granita deal has a lot to answer for, for the plain truth is that a great deal of Whitehall machinery has been wrenched apart and restructured to placate the ambitions of a thwarted Chancellor. This Bill is just one small part of that decision.

Rob Marris: I shall return in a while to the out-to-lunch remarks about Granita by the hon. Member for Chichester (Mr. Tyrie).
	I want to put the Bill, which I very much welcome, into an historical context. Many of my generation, and those of others in the Chamber today, were scarred politically by our communities' experience of the 11-plus and the idea that, at age 11, one was either going to become a manual worker or an academic, A-level type with a higher certificate, as it used to be in England. We worked hard politically to overcome that bifurcation at age 11 with our support for comprehensive education and for encouraging young people into higher education. The pendulum has swung too far and what many of us, including me, overlooked, is that training is necessary for many manual jobs and that we should be looking for people divided off at age 11 into the non-academic stream to be able to get back, as adults, into the academic stream. That is what the Open university, one of the jewels in the crown of Harold Wilson's 1966 to 1970 Labour Government, was about. What has only just started to happen in the other direction is that, in the past three or four years, we have been looking at ways for those who were on the academic track to take a non-academic or less academic route to education and training.
	Also part of the historical context is the fact that we have 2 million more people in work and the fact that in certain areas of the country there are huge skills shortages. Some of that is being addressed by imported labour, which in some cases will be temporaryfor example, the use of Filipino nurses in the health services. However, the bulk of the problem should and will be solved by training home-grown labour.
	The support that we as a society, the previous Government and this Government provided for those entering higher education was entirely worth while, but again the pendulum swung too far. Those who were continuing with training but were not in higher education were second-class citizens when it came to social and Government support for their endeavours. That is true of young people as well as mature students. I very much welcome the 14 to 19 strategy for increased curriculum flexibility that has come from the Tomlinson report. The Bill fits neatly with that as additional financial support for those who, for example, have had disrupted schooling and go on to do at 19 or 20 what some of their peers might have done at 17 or 18. It is very welcome and it is overdue.
	You will know, Madam Deputy Speaker, of the huge skills shortages in your area, which is the same as minethe black countryand of what the Learning and Skills Council and Connexions have been doing. We are starting to change that, but it will take a long time. It is particularly relevant for an industrial area such as the west midlands. Not so much down in the southern part, where you are, Madam Deputy Speaker, but where I am in Wolverhampton, there is a history of people training on the job but not getting formal qualifications. Although that is important, we need to move as a society towards more formal qualifications as well as training on the job that leads to qualifications. The Bill dovetails nicely with that, and it will be of tremendous benefit to our region and sub-region.
	The hon. Member for Chichester rightly mentioned the complexity of the Bill. He talked about the various ways in which young people could access not only training but financial support, whether child benefit or education maintenance allowance. He mentioned the Bridging the Gap report, which refers to slightly different figures from his but reaches exactly the same end point. It says:
	Money is paid through at least eight different agencies (with a ninth heavily involved) on behalf of two Government Departments.
	That was also mentioned by the hon. Member for Banbury (Tony Baldry) when he talked about how young people would find out about this support, and it is what I found in my preparatory research for the debate. The aims of the Bill are twofoldto provide state support for trainees who are unwaged on training courses and for those who are, to put it in shorthand, at further education colleges and carrying on with courses until the age of 20 or so.
	That is a simple and laudable goal; the complexity lies in the delivery mechanism. I caution the hon. Member for Chichester as regards talking about simplicity. Simplicity is one of those things, like cutting red tape, that is terribly attractive to Members all over the House, who hope that it will be attractive to those whose votes they seek to garner. As my hon. and learned Friend the Member for Redcar (Vera Baird)a fellow member of the Work and Pensions Committee who will speak laterand I know, the Child Support Agency is a classic example. Parliament decided to simplify CS1, the first system that was brought in, and introduced CS2a system based on 15 per cent. for the first child, 20 per cent. for the second child, and 25 per cent. for three or more children in terms of the non-resident parent's obligation to pay. That is a simple formula that is understandable to the manit usually is a manin the street, but the complexities of putting it into effect have bedevilled the Department for Work and Pensions and the Child Support Agency. What appeared to be simple on paper became terribly complex when one tried to put it into operation. The reason for that is simplepeople lead complex lives. If we as a House try to simplify matters too much, it may well imperil support for children and for young people engaged in education and training who will be covered by the Bill potentially from the ages of 16 to 21.
	The Bill is a step forward because it will start to address the skewed choices that some young people have made through force of financial circumstance. Paragraph 28 of the regulatory impact assessment states:
	One possible positive effect is that training providers may find they are on a level playing field with FE colleges because young people's decisions are not being skewed by differentials in financial support between the two learning routes.
	It is very important that young people have a more level playing field of choice.
	The costs have been adverted to. Government spending is massive. One should never be cavalier with taxpayers' money, but the Bill is a very positive step. As set out in the regulatory impact assessmentthere will of course be changed behaviour, as the hon. Member for Chichester saidthe cost of the 80,000 unwaged training positions will be 105 million per year. In fact, one hopes that there will be some change in behaviour and that more young people who are not on the training contracts will engage in them, thereby helping to address skills shortages. Relative to Government spending, that cost seems small. If the number of positions were to double from 80,000 to 160,000, and the per capita costs were roughly the same, the figure would rise to 210 million, with tremendous social benefit in terms of those young people's self-respect and dignity. There will be positive benefits for society when those young people come through the pipeline having been trained.
	The cost of paying for FE placesagain that is shorthand, but they are the main focusis 65 million a year up to the age of 20 and 75 million up to the age of 21, with some attendant costs that are not mentioned.

David Laws: As a matter of interest, if the Government said that they were not expecting any behavioural effects from these two changes, would the hon. Gentleman still think the measures worthwhile in their own right?

Rob Marris: I certainly would and I thought that I had said so. This training is a social good in terms of respect and dignity for young people who undergo it and receive some form of social recognition through money, which for many people, particularly young people, is a good way of getting recognition. Some young people who do not change their behaviour will be better off as a result. There will be significant advantages if there is changed behaviour in the direction that most of us would expectthat is, more, rather than fewer young people undergoing training.
	Before I move on to my final remarks, I want to make some miscellaneous points. I am delighted that the Government published a regulatory impact assessment, and the partial one on top of it, so that we have some figures. They may not be as full as some Members would like, but they were published in time for the debate. I am particularly pleased to see the indicative draft regulations, which I am sure that the hon. Member for Buckingham (Mr. Bercow), who ducked out of the Chamber briefly, dashed out to read with his usual thoroughness. They are but two pages, so they are a quick read. Regulation 2 defines approved training as:
	in relation to England, arrangements made by the Government known as 'Entry to Employment' or 'Programme Led Pathways into Apprenticeships'.
	I confess that I do not know the exact details of those programmes, but I am pleased that in this case the Treasury managed to produce some draft regulations for Second Reading. Would that every Department did that in time for Second Readings of Bills that contain references to regulations that will be made after their passage.

John Bercow: I am in a generous mood. May I tell the hon. Gentleman that, although ordinarily I am struck principally by the opacity of secondary legislation, and by the fact that it tends to raise more questions than it answers, this set of draft regulations is truly a model of clarity and of brevity?

Rob Marris: I certainly agree. That is nothing less than the hon. Gentleman and I would expect from the Treasury.
	I have a couple more miscellaneous points with which I think that the hon. Member for Buckingham, who is somewhat pedanticstrangely, I too am sometimes accused of being sowill sympathise. Clause 6(2) starts with a conjunctionBut. That is a horrible piece of journalese, and I hope that the Committee will change it. Conjunctions such as because and although are acceptable words with which to start a sentence, but but is not.
	Clause 7 gives the short title of the Bill. It states:
	This Act may be cited as the Child Benefit Act 2005.
	I think that that should read: This Act may be cited as the Child and Qualifying Young Persons Benefit Act 2005. That is not pedantry. There is a problem with the Bill, as I read it, and the approach of the Government, as I read it. The goals are simple, but the ways of getting there are complex, as the hon. Member for Chichester pointed out. I am not sure that the Bill adequately addresses the question of independence for young people. We have to bear it in mind that, since about 1971, the age of majority has been 18. As I understand it, the education maintenance allowance, which was piloted in Wolverhampton, has been successful throughout the country. Year 12 participation increased by 5.9 per cent and year 13 participation by 4.1 per cent. in the EMA pilot areas. It is paid to the student and that is a mark of independence. Many students who are doing A-levels in a traditional sixth form in year 13 will be 18. I understand that they get the money directly, although I am prepared to be corrected because of the complexity of the matter. That gives the individual independence.
	Similarly, the minimum training allowance is paid to the trainee. Conversely, child benefitor child and qualifying young person's benefitwill be paid through the parent or guardian. If so, 18 and 19-year-olds, one and two years into their adulthood, will remain locked in, not only through means-testing but because of who receives the giroor automated credit transfer, as it probably is nowadays. Who will get the money? Will the young people get it in their own name and right or will it be refracted through their parents or guardians? As I understand the Bill, the latter will apply. That is a step backwards and I shall highlight the point, and the way in which some young people feel, by referring to my experience, albeit not directly of the subject of our debate.
	As some hon. Members know, I emigrated to Canada when I was 18. I was born and raised in Wolverhampton and I wanted to see the wider world. I have been back in Wolverhampton for many years and am very happy there, but I emigrated to Canada, where the federal age of majority was 18. Thus, at 18, with a scholarship for university, I could go there so I went and I had a great time. I was at the university of British Columbia, which, as some hon. Members know, is a distinguished institution, and I picked up a couple of degrees there. However, in British Columbia, the age of majority was 19 and a driving licence could be obtained at 16, 17 or 18 only if a parent or guardian co-signed the application form. I had a United Kingdom driving licence, but it had to be transferred to the provincial jurisdiction in Canada. One could not get one's driving licence without parental consent until the age of 19. That was the age of majority in the provincial jurisdiction for road traffic matters, which, under confederation, were in the power of the province. Hon. Members will not be surprised to know that I was darned if, having emigrated at 18 and being totally financially independent of my parents, I would seek their permission to get a driving licence. I therefore had to wait several months until I was 19 to take a driving test.

David Ruffley: What has any of that to do with the Bill?

Rob Marris: I am sorry if the hon. Gentleman believes that my comments are irrelevant. I am trying to make a point about young people's feelings by referring to mine at the age of 18 about being perceived as appendages of their parents when they are adults. The Bill appears to perpetuate that and make the position worse. Whereas the minimum training allowance is paid to the individual trainee, the replacement young person's child benefit will be refracted through a parent or guardian, thereby lessening the young person's independence. That is the relevance of my comments. I apologise to the hon. Gentleman if I did not make it entirely clear. I wanted to make a point about the Bill's structure and the way in which the expanded child benefit, which I greatly welcome, will be assessed and paid. I should like the Government to tackle that.

David Laws: We join the hon. Member for Chichester (Mr. Tyrie) in welcoming the Bill, especially two specific provisions: first, extending child benefit and the child tax credit to unwaged trainees and, secondly, allowing young people who reach the age of 19 and are on a course to continue on it with the benefits that they received previously. We believe that both changes are sensible and we support the broad thrust of the Government's strategy to try to ensure a coherent, simple and helpful system of support for young people.
	The hon. Member for Wolverhampton, South-West (Rob Marris) mentioned one reason for the Bill: to ensure a fair and level playing field between young people in training and those in formal education. That is sensible and clearly reflects some of the changes that the Department for Education and Skills is currently considering. The Bill has to be viewed against the background of the Government's attempts, for example, through the education maintenance allowance, to encourage young people to develop their skills and to help those young people who would otherwise be under pressure to leave education and training and go straight to work. We welcome the opportunity for those people to continue in education and training.
	The hon. Member for Chichester made several points about the Treasury's involvement, on which it is worth commenting at the outset. We welcome the strategic interest that the Treasury has shown since 1997 in economic and social issues. The Red Books have got larger over the years. Although those of us who read them note their increasing cost and length, we also note the broad strategic economic and social set of objectives that the Government present, steered by the Treasury, either because of the Granita dinner or for some other reason. It is important for any Government to have a set of broad economic and social objectives. They should be pursued by some part of Governmentthe Treasury or perhaps the Cabinet Office in future. The Cabinet Office would have to do a reasonably good job to co-ordinate them and create a sense of coherence in the way that the Treasury has done since 1997.
	Those relatively complimentary comments come with a reservation that, although the Treasury has a useful co-ordinating role, I am not sure whether it is sensible for it to be seen to lead on matters that would normally be the domain of individual Departments. No doubt all hon. Members who speak in the debate, including from the Front Benches, will be well briefed, but many of the detailed and substantive provisions in the Bill are matters more for the Departments for Education and Skills and for Work and Pensions. The measure would benefit from not only their involvement but their leading on the issues. It would also benefit from the Treasury playing not only its part in the broad strategic direction of Government policy but a policing role for large amounts of public expenditure. The costs may be clear but the benefits are not.
	The Bill is small and uncontentious but important. First, it deals with two substantive matters that affect approximately 160,000 young people. It is a worthwhile measure for that reason. Secondly, it is clearly part of a much broader and longer-term strategy to simplify and rationalise the system of support for children, young people and young adults. The hon. Member for Wolverhampton, South-West made the sensible point that having 19, 20 and 21-year-olds on child benefit appears bizarre and eccentric. I suspect that when people outside the House realise the position, they will find it eccentric. It will lead to even more confusion of the sort to which the hon. Member for Chichester referred. That is amplified by the sketch and graph in the paper that the Government issued in March 2004 and that attempts to set out in visual form the existing systems of support for young people. It is extremely challenging. I hope that the Government will take the opportunity in the longer term to rationalise and simplify support for young people. I hope that, in future, we will not have to rely on child benefit as the means of support for young people who have clearly entered their adult years.

Rob Marris: The hon. Gentleman referred to my comment about the independence, or lack thereof, of 18 and 19-year-olds. Given that a qualifying young person's child benefit will apparently be paid through a parent or guardian, does he agree that there is a potential breach of the Human Rights Act 1998, because 18 or 19-year-olds would have to tell their parents that they were in training or education at a further education college? They may not wish to do that, but if they do not, they may not be able to gain access to the money.

David Laws: The hon. Gentleman makes an important point. Where there is already a breakdown in the relationship between the young person and the parent, a different category of benefit entitlement might apply anyway and they would not be covered by the child benefit provisions. However, there will be many marginal cases, and this should be one of the issues that we consider very carefully in Committee.
	The final reason why this is an important Bill is that although it is short and seems modest, it involves quite a lot of public expenditure. The total cost, as the hon. Member for Wolverhampton, South-West said, is about 170 million a year, or 6 for every taxpaying household in the country. That is not a huge amount, but it is not a modest amount either, and we should certainly subject that sort of expenditure to a great deal of scrutiny.
	I want to touch on four issues today. The first is the cost and benefit calculations that have to be made, and the extent to which they have been made in the regulatory impact assessment. Secondly, I want briefly to look at any problems likely to arise when changes are made to the entitlement of unwaged trainees. Thirdly, I want to look at the way in which the changes will affect young people who are still in education or training at the age of 19. Fourthly, I want to make a couple of brief comments about the Government's future strategy in these areas.
	I want to start by joining the hon. Member for Chichester in expressing surprise at the paucity of information in the initial regulatory impact assessment, and to express my relief that a partial supplementary assessment was published recently. There was a wonderful letter at the back of the initial regulatory impact assessment, which was no doubt among the many things on the Paymaster General's desk that she had to sign at the end of a busy day. She had to put her signature beneath this sentence:
	I have read the regulatory impact assessment and I am satisfied that the benefits justify the costs.
	I do not know how she came to that conclusion by reading the regulatory impact assessment, because it is extremely brief and extremely unhelpful in terms of assessing both the benefits and the costs.
	In fairness to the Treasury, we have had the supplementary partial regulatory impact assessment, which is pretty clear on the costs. Some issues might arise in relation to the costs based on our assumptions about what individuals will do in responding to these changes, but the cost side of the equation is pretty clear, as I am afraid it usually is when any Government introduce a change in policy. We always know what it will cost, and those cost estimates tend to be reasonably reliable.
	It is far less clear what kind of benefits we can achieve through these changes. Some might be achieved simply through creating a fairer system and having a more socially acceptable set of benefit entitlements. That was the implication of the comment made by the hon. Member for Wolverhampton, South-West when I asked him whether he would still be in favour of the two changes even if there were no economic benefit. It is quite possible that we would be in favour of them for other reasons, although I doubt that that would be the case in relation to educational maintenance allowances. If we had spent additional money on those and there had been no increase in the staying-on rate, I suspect that few of us would think that it had been money well spent.There are, therefore, reasons for us to look very closely at the economic benefits of the proposals.
	This area of public expenditure is competing with every other one for a slice of the national cake and for available expenditure, which is likely to be quite scarce after the next election, given the state of the public finances. If we look at the section of the regulatory impact assessment that discusses benefits, which the hon. Member for Chichester was generous enough not to read out earlier, we find that it states:
	The benefits of the Bill are two fold. Firstly it enables implementation of the reforms to the definition of a child to address two key anomalies.
	It then sets out the anomalies that are dealt with in the Bill. It goes on:
	Secondly it introduces a degree of flexibility to respond to curriculum changes in England expected to flow from the 1419 working group, chaired by Mike Tomlinson.
	In other words, all that the section on benefits says is that the benefits are what the Bill does, and that it is going to introduce a degree of flexibility in relation to changes that we do not yet know will actually take place, but that are simply expected to take place. On that basis, the Paymaster General has signed a piece of paper stating that she is satisfied that the benefits justify the costs. I am glad that she did not say that the benefits exceeded the costs, because it would be very difficult to establish that from the information that we have. This is an important issue, however.
	The hon. Member for Chichester alluded earlier to some of the estimates that we would expect the Treasury to have made in order to come to a reasonable monetary estimate of the benefit of this legislation. The Treasury must have made some sort of assessment of the effect of the extension of child benefit and the child tax credit to unwaged trainees. Presumably, it could have an impact in two ways. First, it could encourage individuals who would otherwise have gone into paid employment to go into unpaid employment. That could have a significant cost to the Exchequer. Secondly, it is quite possible, as the Government have acknowledged, that it might act as an incentive to draw people out of formal education into unwaged training, which could end up being less expensivein that narrow sensefor the Government.
	However, we are left with no sense of the estimate that the Government have made of the effect of these changes. Without that, we have no sense of what the Government would consider to be a success or a failure in terms of the effects of these changes on people's behaviour. If we are to know how successful the provisions have been, and whether the extent of the incentives is sufficient, we need to know what the Government expect. I hope that the Economic Secretary will be able to say more about that later.

Mark Francois: I am following the hon. Gentleman's argument closely, and I think that we all agree that there is some slight confusion about the Government's figures on the benefits of these changes and exactly how much they are going to cost. This could have been a Department for Work and Pensions Bill, or even, arguably, a Department for Education and Skills Bill, but it is a Treasury Bill. Is there not a delightful irony in the fact that the Treasury, of all Departments, cannot be specific about the figures involved?

David Laws: The hon. Gentleman makes a good point, and it is made stronger by the fact that it is the Treasury that should be acting to exert discipline in these circumstances. However, if the Treasury is seen to be the lead Department, it is much more difficult for it to enforce a degree of rigour in relation to the costs and benefits.
	The costs and benefits are also relevant to any incentives that might be created by the changes for people to extend their courses. The Government have expressed their concern that there might be an incentive for people who have turned 19 to carry on their courses for longer. This is not an area in which I claim to have expertiseinput from colleagues from the Department for Work and Pensions and the Department for Education and Skills would be useful here. Will there also be an incentive for employers to switch from having young people in training on a waged basis to doing so on an unwaged basis in order to exploit the changes in benefit entitlements? The Government have suggested in some of their comments in the regulatory impact assessment that they are concerned about that, and there are allusions to the need to deal with the issue. However, we are given no sense of how they intend to do so. The effects that the changes will have in regard to child benefit and child tax credit also relate to those people who stay in education beyond the age of 19. We need to know what effect the Government expect that to have.
	It would also be helpful if the Economic Secretary could clarify whether the costs of the Bill have been built in to the existing public expenditure estimates, or whether the Chancellor will need to make an additional provision for this expenditure in the next Budget. In other words, is this already in the Treasury's public expenditure plans, or will they have to be increased to take account of these provisions?
	We need to consider a number of issues relating to the substantive non-cost issues resulting from the two changes. The first category relates to the changes in regard to unwaged trainees. The Paymaster General said earlier that she believed that all the 80,000 people currently in unwaged trainingthat was the figure as at September 2004would receive child benefit and child tax credit under the changes. That is not the impression that I get when I read sections 9 and 10 of the supplementary partial regulatory impact assessment, as it seems that the Government have had to make a judgment about how they extend this entitlement in practice, and how they define and seek to regulate the category of people who are counted as unwaged and in training.
	The Government appear to have had two different options: one was to extend those entitlements to all unwaged trainees, and the other was to try to come up with some definition. I think that the definition that the Government have come up with is that those benefits will be extended to
	those who do not have a contract of employment on Government Supported Training programmes.
	Section 9 of the supplementary regulatory impact assessment goes on to say that the Government
	will do this by naming the relevant programmes of Government Supported Training in the new regulations.
	I am therefore dubiousI admit that the Paymaster General said that she would come back to me on thisabout whether her comment that all 80,000 individuals on unwaged training would be covered is likely to be realised in practice. I suspect that a small group of people will be missed out, but without the expertise in that area I am unable to speculate on how large that group may be. I hope that the Economic Secretary may be able to comment on that later and tell us whether any groups might otherwise miss out.

Rob Marris: Is not the answer to the hon. Gentleman's question in the final sentence of paragraph 10 of the supplementary partial regulatory impact assessment, which reads:
	The Exchequer cost of extending the same package of support as for full-time education to unwaged trainees in all programmes of Government Supported Training is 105 million?

David Laws: I am grateful to the hon. Gentleman for making that point. That is not how I read it. My reading is that that cost estimate of 105 million is based on the conditions imposed in paragraph 9, which relate specifically to particular Government-supported training programmes that will be spelled out. I think that that is an attempt by the Government to make sure that there is not abuse of those entitlements by employers or others who make bogus claims about people on unwaged training programmes. I fear that some people may be missing out, perhaps understandably, as the Government want to make sure that it is policed effectively, but it would be useful to know a bit more about it.

Andrew Tyrie: The hon. Gentleman is on to a strong point, which I considered making myself. The point was made to me by the Prince's Trust, whose letter I have in front of me. It strongly urged clarification on this point, and specifically wanted to know what is meant by Government-supported schemes, and whether voluntary work, work experience and other more informal forms of training will be ineligible.

David Laws: I am grateful to the hon. Gentleman for reinforcing that point, which seems to indicate that it may be useful for the Economic Secretary to clarify that issue today.
	My other concern is that there may be employer incentives to switch between waged and unwaged training, which I mentioned earlier. The Government seem to share that concern, because in the initial regulatory impact assessment, in paragraphs 20 and 21, they set out that there might be some problems in that area. Paragraph 21 says specifically that devolved organisations, with responsibility for securing the progression of trainees from unwaged to waged status, may have to bring in new accountability arrangements to ensure that no adverse impacts or unintended consequences flow from treating unwaged Government supported training more generously. I would be grateful if the Economic Secretary could comment on what proposals there may be to make sure that there is no abuse or adverse impacts.
	Finally, Barnardo's has made some useful representations. It is concerned including on the issue of unwaged traineesabout whether the proposals will reach the underachieving and hard-to-reach group of young people with whom it must often deal, who do not always fit into the neat packages in terms of behaviour, work patterns and benefit entitlements, that the Government, and all Governments, would like. The Barnardo's briefing, which many of us will have received before today's debate, states:
	The aim of the new financial support package is to encourage more young people into training or education but it is difficult to see how a measure that 'rewards' the family rather than the individual young person will assist training programmes to recruit under achieving or hard to reach young people.
	That touches on the argument that the hon. Member for Wolverhampton, South-West also made earlier. I would be grateful if the Economic Secretary could comment on that, too.
	On extending the benefit entitlements and child tax credit entitlement to those who reach the age of 19 and over, we support the change, which seems entirely sensible. Clearly, there are risks of wilful or passive abuse, and the Government's initial suggestion that the cut-off would be raised only to 20 rather than higher seems sensible. The hon. Member for Wolverhampton, South-West also pointed out the sheer oddity of potentially extending child benefit to 20 and 21-year-olds and he is absolutely right that we should hope that that is not the long-term mechanism that the Government intend to use to get help to those young people. Fortunately, we understand that the Government are engaged in a much more far-ranging inquiry into support for young people in future, which will be designed to rationalise all that. I do not imagine that the Government will be considering child benefit to support people in those circumstances in future. If the Economic Secretary could clarify that it would be useful, and it might also address the concerns of the hon. Member for Wolverhampton, South-West about parents getting involved, even though the young people concerned have become adults under UK law.
	Barnardo's also makes a very effective point about hard-to-reach young people and the age 19 cut-off. Its briefing says that
	from our own experience we know that there are young people who, because of their life circumstances, do not access training until later and require a longer period of training before they are fully ready to move into employment . . . If the Child Benefit and Tax Credit extensions are not to apply to themand we acknowledge the incongruity of Child benefits for 21 year oldsthen we would wish to see some other sort of continuing financial support for this group of young people.
	That reinforces the comments made by the hon. Member for Wolverhampton, South-West and the need for us eventually to move beyond reliance on child benefit in this area.
	Those are the issues that are specifically relevant to this Bill, with which I hope the Economic Secretary will deal. It is also worth making a couple of points about the Government's wider strategy, because this Bill is something of a milestone along the way to a new system of support for young people. We ought to be thinking about what we are seeking to achieve in that new system.
	There is a degree of ambiguity in the Government's strategy in relation to what they are seeking to achieve. A useful paper came out earlier this year, Supporting young people to achieve, which was sponsored by the Treasury, the Department for Work and Pensions and the Department for Education and Skills. On page 34, it states:
	As well as providing a stable bridge of income between activities, support paid at the same level irrespective of activities would not distort choices.
	The argument is that the Government would put in place a system of support for young people in which choices between different elements of education and training would not be distorted by economic incentives and the way in which young people are supported. That comes back to the level playing field argument and the reasons for extending benefits to unwaged trainees. If we read on, the next paragraph states:
	Financial incentives would influence young people's behaviour in several ways. First the additional weekly amount payable direct to the young person would provide an incentive for them to progress into learning.
	There we come to the other part of the Government's agenda, which is not really to have a simple level playing field, but to try to tackle some of the problems to which the hon. Member for Wolverhampton, South-West alluded earlierthe inability of many young people to stay on in education and training at age 16 or 17 because of economic pressures to go into work and earn money. That is causing the Government not to create a level playing field, but to create certain incentives that are deliberately designed to encourage people to stay in education and training. That may be a very good thing, but it is not the same as a level playing field. It also raises a series of problems in terms of Government policywhich brings us back full circle to the issue with which the hon. Member for Chichester began, namely, costs and benefits.
	If the Government are going to spend a lot of money, they must be very cautious. They must ensure that spending that scarce money actually does change behaviour, rather than simply leading to the deadweight costs that we spoke of earlier. The incentives that the Government implement may not always achieve that balance between costs and benefits. Moreover, in making these changes the Government may, as Barnardo's suggests, impose conditions that will not be easily met by the most vulnerable in society.
	There are a number of concrete issues on which we need reassurance from the Governmentnot just the issue of the cost-benefit balance, but some of the practicalities involved in the Bill's implementation. There are far bigger issues relating to the Government's strategy, with which we will deal on another occasion.

Liam Byrne: I am grateful for the opportunity to speak in this important debate. It is important because it is about young peoplethe people who will inspire us and take our country, our communities and our economy in new directions during this century. They are the young people who, I hope, will not just reinvent the country but support us in what I trust will be a long and happy retirement.
	The fact is, however, that many young people do not receive the credit they deserve. Sometimes our communities blame them for many of society's problems; sometimes, indeed, they are afraid of them. Nevertheless, our young people are not just an equal part of society butas President Kennedy once put itthe gold reserve of any nation. They are the source of our future wealth and well-being.
	I came to understand that vividly last Friday, when I was joined at Shard End community centre by the chief constable of West Midlands police, Paul Scott-Leea remarkable public servant in his own right, who has served the west midlands extremely well. He joined me for a cup of coffee and a talk with local residents about antisocial behaviour. It was a feisty meeting, as such meetings often are, but Mr. Scott-Lee made a simple and powerful point: he said that as a community, we must take care never to demonise our young people. It is true that some young people will always cause problems for others, just as many old people will. I have dealt with enough nuisance neighbours in Hodge Hill to know that the middle-aged are sometimes just as big a problem as the young.
	I have to say that when I first heard Paul Scott-Lee express his views I was sceptical, but on reflection I realise that he was right. We should remember that young people can be inspirational too. We need only think of the way in which Amir Khan captivated a nation at the Olympics; we need only think of young Ms MacArthur battling her way around the southern oceans at this very moment. Indeed, this country once appointed someone in his early 20s as Prime Minister. Young people in history and today have helped to make the country great, and it is young people of genius and spirit who will power it to a greater future.
	Everyone who will work in the labour market of 2020 is now alive, yet that world of 2020 will be very different from the world of today. First, our young people will have to support rather more senior citizens. By 2020, 30 per cent. of the UK population will be over 60, up from 20 per cent. today. Today the over-65s constitute 24 per cent. of the working population; by 2025 that will rise to 33 per cent., and by 2050 it will rise to nearly 40 per cent.
	Secondly, it will fall to our young people to rise to the challenge of reinventing the way in which our world works. We can see clearly some of what will happen in the future when we reflect on what has happened over the past 20 years. Today, a throwaway musical birthday card has more computing power than the mainframe computer of a couple of decades ago. In 2020, computers will be 4,000 times as powerful as they are today. Nowadays, an estimated 10 to 20 new medicines resulting from biotechnology are launched every year. By 2015, genetic therapy will treat 30 per cent. of life-threatening diseases with a genetic root. All those new possibilities will change the way our country looks, and will power an economy that by 2020 will be 50 per cent. bigger than it is today. It is our young people who will drive those changes.
	We will all have different stories about what that means in our constituencies. I know what it means in Hodge Hill. I recently visited Hodge Hill mixed school, where the head teacher, Marie McMahon, rightly talked proudly of the transformation in the school's results over the past year. She introduced me to some of the school's outstanding graduates. Once upon a time, they would have left school for unemployment, or worse; now, thanks to this Government's reforms over the past seven years, they are ambitious to stay in education, and financially equipped to do so.
	All those young people had one thing in common: an ambition to leave school and go on investing in themselvesworking hard not just for themselves but for their families and communities. They were, quite frankly, an inspiration. In a way, the Bill is about how we as a country can support people like them as they face the possibilities of tomorrow. That is of particular concern to many of us in Hodge Hill, because we have one of the lowest post-16 participation rates in education, and consequently one of the lowest rates for participation in higher education. Children and young people are now very well served by many of the schools in my constituency, and by many of the local further education institutionsorganisations such as City college, blessed by great public servants such as Kate Morris, who retires today after a lifetime of service.
	Nevertheless, the country confronts two problems. How can we create an economy that is healthy, but in which each of us has an equal chance to become wealthy? To achieve that goal we must not just improve our national productivity but ensure a more equal distribution of skills. In the past few years, we have made great strides in transforming productivity. We are now as productive as Germany, and we are fast catching up with France. That is due in no small measure to our national investment in skills. In 1981, 7.8 million workers were without qualifications; now 90 per cent. have formal qualifications. Today 28 per cent. of the work force are educated to NVQ level 4 and above, an increase of 133 per cent. in 20 years. Seventy per cent. of those aged between 25 and 64 have had a secondary education, and half those between 16 and 18 are in full-time education or training, compared to just one third in 1985.
	That is a pattern that we must sustain and improve if we are to stay ahead as a nation. In the years to come our economy will need reskilling, and reskilling again. In 1980 almost no one predicted the advent of the personal computer, and in 1990 no one predicted the rise of the internet; yet today information technology skills are judged essential by every employer. If we are to accelerate the pace of investment in productivity and create real opportunities for all our young people to share in the wealth of tomorrow, we have a long way to go in terms of investing in skills, as my right hon. Friend the Paymaster General explained so eloquently.
	Today, the single most important reason for economic inactivity is a lack of education and training. Our intermediate skills still do not compare well with those of our competitors. Indeed, just over one third of the UK work force have reached NVQ level 3 or equivalent, whereas three quarters of the German work force have done so. That is why the Bill is so welcome to the 7,500 young people in Hodge Hill. It provides nothing short of a 40 per cent. pay rise for those of our young people who seek a training-based option at 16.
	Thanks to this Government, students from poor backgrounds who want to stay on at school can now access up to 30 a week in education maintenance allowancea payment that does nothing to affect access to a range of other benefits. Yet those who take up a training allowance might receive as little as 40 a week, with their access to supplementary benefits disallowed. Given that income support currently stands at 43.25 a week, we can see that any such person, no matter what their ability or ambition to learn, would face a very difficult decision if they were experiencing hard times. We must change that. We must make sure that investing in oneself has a pay-off. We have to ensure that the right benefits are available to our young people, and maximise their chances of living a life off benefits.
	Many Members from all parts of the House share a simple ambition for this country: that if we can find a shred of talent or potential in any of our young people, we should nurture it and invest in it, and help it to grow into something of pride and value not just to one family but to a whole community, and not just for a fleeting moment but for a lifetime. That is surely a worthy ambition for this House, which is why the Bill deserves unanimous support.

Tony Baldry: The hon. Member for Birmingham, Hodge Hill (Mr. Byrne) has made a thoughtful and interesting speech, and none of us would dissent from anything that he said. Many of us enjoyed walking round his constituency last year; getting to know a part of Birmingham that we had not hitherto known was an interesting experience. In 22 years as a Member of the House, this is the first time that I have taken part in a debate, other than Budget debates, to which Treasury Ministers are replying. Indeed, the Whips suggested to me that participating this afternoon would widen my horizons.
	I want to make only three points, and I hope not to bore the House in doing so. The first echoes the comments of the hon. Member for Birmingham, Hodge Hill. I am fortunate enough, in my work with the International Development Committee, to travel the world fairly extensively. We often think of certain places as being poor, but if I were king for a day, I would try to ensure that as many people as possible visited China. There are cities and towns growing up in China of which we have not heard, and which are as large as, if not larger than, cities such as Coventry and Bristol. China's growth and its skills capacity are phenomenal, and it will challenge the competitiveness of Europe and the rest of the developed world in a way that UK and European business has not even begun to grasp. We think of countries such as India as poor, and some parts of it indeed are. However, places such as Bangalore are incredibly successful and high-tech. If we do not ensure that our young people acquire the maximum number of skills, Britain and Europe will fall behind; it is as simple as that. Unskilled and unqualified people will undoubtedly become unemployed.
	My second point echoes the one that I made in an intervention. The Sure Start scheme is excellent, but perhaps we also need a firm finish scheme. We need an undertaking from the Department for Education and Skills that every youngster, at some stage in their school education, will have an individual interview with someone from Connexions who can go through all the options available to them. It is human nature for schools to want to encourage the maximum staying-on rate. Given the current capitation formula, the more people who stay on, the more money schools get, so they tend not to explain to youngsters that other opportunities exist, such as attending local colleges and doing NVQs, BTECs, national diplomas and various other training. I simply am not confident that such possibilities are pointed out to them. To be honest, nor am I confident that Connexions is even connected in my part of the world. The learning and skills council is an element of the machinery of government that still needs to be fitted in.
	On paper, having a uniform and straightforward maintenance and support system for youngsters is a brilliant idea, but parents have got to be able to understand it. I hope that the Inland Revenue, perhaps with the help of the Plain English Society and others, will produce a booklet explaining to parents how the system works. Library briefing papers and other such documents tend to assume that all parents are rational, and that we sit down and think of all the options. Often, our children tell us what they want to do and we interact with them, and we must also remember that many parents have other dimensions to consider. They may have children with disabilities, they may be divorced or separated, or their children might themselves be carers. Life is not simple, therefore, and I hope that Treasury Ministers will undertake to produce for parents straightforward information that they can understand.

Kelvin Hopkins: I am interested in what the hon. Gentleman is saying, and he is right to emphasise the role of parents. However, many parents are not competent in this regardthey are not fully literate or numerateso the state has to intervene in such cases to make sure that young people get a good start. Will he not commend the Government for the emphasis that they have placed on teaching basic skills in primary education? That is the first base, which all children must get to.

Tony Baldry: We all want to enhance primary education. If the hon. Gentleman is right in suggesting that some parents have difficulties in that regard, that is all the more reason why we need to be confident that they understand the various choices available to them. Youngsters must not feel under pressure to leave school early because their parents or guardians do not believe that they have the financial resources to support them.
	If we do not enhance our skills base, we will simply get left behind. Secondly, I hope that every youngster at some stage during their school career, before they take their GCSEs, can have a personal interview with a Connexions representative, who can go through the various options with them and ensure that they have some form of career and education plan between the ages of 16 and 19.
	Thirdly, I hope that we can be confident that parents will be given some straightforward briefing, and I hope that it will be better than that given for the tax credit schemes. What I am about to say might sound rather portentous, but I am not sure that it is possible to say such things without sounding that way. I am fortunate enough to be a lawyera barristerand I spend all my time construing documents, yet when people come to my constituency surgery with information on the various tax credit schemes, I find trying to understand it all harder than dealing with High Court pleadings. How ordinary people can be expected to understand it I do not know.

Frank Field: Is not the situation even more difficult when constituents appear in our surgeries with 15 different Government documents telling them what their tax credit is? If we as Members of Parliament cannot sort out such things, our constituents certainly cannot.

Tony Baldry: There are also cases of constituents getting different letters, dated the same day, giving different amounts.
	This is a non-contentious Bill that commands support throughout the House, but perhaps the icing on the cake would be a really good straightforward booklet for parents, produced with the help of the Plain English Society and others, so that we can ensure maximum take-up of the benefits that the Bill seeks to provide.

Iain Wright: I am pleased to follow the hon. Member for Banbury (Tony Baldry), not least because in his commentswhich, like those of the hon. Member for Buckingham (Mr. Bercow), who is no longer in his place, were non-partisanhe tried to address the principal point of the Bill. As he said, we have a skills gap in this country and must deal with it in order to compete globally with the likes of China and India. I contrast the hon. Gentleman's welcome comments with those of the hon. Member for Chichester (Mr. Tyrie). He, too, is no longer in his place, but he tried to make a petty party political point.
	The fact remains that since 1997, child benefit has increased from 11.10 to 16.10 for the first child. That is what really matters to parents out there. It amounts to something like a 50 per cent. increase in seven years. Perhaps I should declare an interest, as a father of four whose family receives child benefit. More important than my own personal experience, though, is that of the 8,700 families in Hartlepool who have benefited from the Government's child support schemes such as child benefit and child tax credit.
	In my brief contribution I shall concentrate on the skills shortages in my constituency, and how the Bill will substantially improve the skills base for the Hartlepool economy. There is a huge anomaly in the present system, whereby child benefit is paid for 16 to 19-year-olds who stay in full-time education, but not for those who enter work-based training. That severely disadvantages young people who may not wish to go on to further or higher education, but choose to enter the employment market through unwaged training.
	At the moment, choosing the route of unwaged training has a huge impact on the household budgets of families in which 17 or 18-year-olds are rightly expected to pay board and lodgings in the parental home. In reality, that prevents young people from exercising real choice, and can push them down a route in life that they may not really wish to follow. That sort of conditioning or soft coercion prevents people from fulfilling their potential. I think that the Bill will help to eliminate that problem, and should therefore be welcomed throughout the House.
	One of the true success stories for Hartlepool in the last decade has been the educational attainment of our schoolchildren. Last year, for example, Hartlepool schoolchildren provided the fastest improving set of key stage 2 results in the entire country. More 16-year-olds than ever before are now leaving school in Hartlepool with qualifications. I believe that the figures speak for themselves. In 1996, 12 per cent. of Hartlepool's 16-year-olds left school without any qualifications; in 2004, only 5.1 per cent. did that.
	Despite those successes and improvements, significant basic skills deficiencies and vocational skill shortages remain in Hartlepool. There is a recognised difficulty in progressing people from low-level, community-based training and learning to high-level skills and jobs. Some specific groups in the community have real difficulty in accessing training opportunities. I am thinking particularly of young carers, of whom there are substantial numbers in Hartlepool. Many of those are 16 or 17-year-olds caring for a sick relative. Every penny counts in such households, and the Bill's provision to continue financial support for young carers to undertake work-based training will help to ensure that they are not trapped in a benefit rut for the rest of their lives through no fault of their own, because of their wish to care for their relatives. That must surely be welcomed.
	Hartlepool was one of the areas that piloted the education maintenance allowance, whereby 30 a week was paid to young people and a bonus payment made at specific points in the year. The effect on the traditionally lowest-achieving and hard-to-reach groups was hugely positive. Not only did the EMA help to increase recruitment of these difficult-to-reach groups, it had a massive impact on retention, with people not only starting training but finishing the course as well. It also improved the attendance and behaviour of individuals. I would suggest that the use of EMAs in Hartlepool has been found to have tremendous benefits for the individual, for his or her family, for the local skills base and for society in general. The experience of my constituency suggests that the Bill will have hugely positive benefits in continuing and extending financial support for young people to continue training that they might otherwise have been unable to do.
	Another of the Government's successes has been the reintroduction and encouragement of apprenticeships. In the large employers in my constituency, particularly Corus, the profile of the work force is curious. It includes men and women in their 50s or older who came through apprenticeships in the 1960s or 70s. There is then a wide age gap reflecting a lack of regard for apprenticeships, perhaps in the 1980s and 1990s. There may have been a change in fashion in that respect. Then we have young lads and lasses who have started work in the past five years or so. We need more apprenticeships in Hartlepool if the local economy is to flourish. Anything that encourages training and apprenticeships, or the prospects of entering into apprenticeships, as the Bill does, is to be welcomed.
	I believe that the Bill complements and expands on the work done in the past seven years to break the cycle of despair, decline and neglect in run-down neighbourhoods, and to create an environment of hope, opportunity, choice and prosperity. The Bill will stand with such worthwhile achievements as Sure Start and the tax credit system. It will also facilitate the improvement of skills in my constituency and elsewhere, which is so necessary to bring about the sustained economic prosperity that will help the country to compete globally. I fully support it.

David Ruffley: I welcome the opportunity to speak in this important debate, for two reasons: first, to highlight the critical importance to this country of training, particularly vocational training, and secondly to highlight the pressing need for greater simplicity in the system of benefit and support for our young people.
	The Government's March 2004 consultation paper, Supporting young people to achieve: towards a new deal for skills has many merits. The Government announced their long-term intention to create a single, simplified system of financial support for young people. The paper also announced short-term measures, which are largely contained in the Bill, including the extension of child benefit and child tax credit to unwaged trainees between the ages of 16 and 19, and changes to benefit and tax credit rules to ensure that young people who reach 19 before they have finished school or college continue to be eligible for benefits and tax credits until they complete their course.
	The skills shortage reveals a lack of real attention on the part of successive Governments to the importance of achieving true parity of esteem for vocational training with academic education up to 19. That is an important issue and the Bill does something to deal with the problem.
	There is a shortage of skills in this country, and we all see it in our constituencies. The hon. Member for Hartlepool (Iain Wright) eloquently drew attention to the problem in respect of the urban part of Britain. I represent a rural part of Britain where the problem is equally pressing. The two main towns in my constituency, Bury St. Edmunds and Stowmarket, would probably be described as market towns, and they have extremely low unemployment. There are many companies in all sectors that just cannot secure the necessary skilled labour. That is partly connected with the fact that there is a buoyant jobs market, but is also to do with a lack of ambition that has afflicted parts of the county of Suffolk for many years.
	I am delighted to report, however, that there have been some sterling efforts made in my constituency in respect of technology status for schools. Stowmarket high school, under the leadership of an exceptional head, Mr. David Oliver, and his dedicated team of governors, pressed hard for technology status. The school understood that in the area of Stowmarket there was a huge and pressing need to skill up our young people from 14 onwards. There has not been a particularly marked appetite among GCSE pupils in the area to go on to university, but there is an appetite for getting high-quality vocational training. My sense is that all political parties in this country understand that it takes massive skill to be a first-class electrician, plumber, bricklayer or central heating engineer. Those are good and noble careers that require skill, dexterity and training. I could not do them, as I am clueless in practical matters. Governments of all political persuasions must do more to celebrate, support and talk up vocational training.
	That should not be necessary. For example, Germany does not have the same problem. Any vibrant economy must have an appropriate mix of education. People who prefer the academic route need to be catered for, as do those who prefer the vocational route. In that context, I also want to take this opportunity to pay tribute to the other schools in my areaKing Edward's, St. Benedict's and County upper in Bury St. Edmunds, and Thurston community college and Stowupland high school.
	The battle continues to ensure that our economy has the skilled work force that it needs to preserve its record of economic growth, but some rather worrying statistics have been unearthed by the Learning and Skills Council, which recently published the key findings of its survey of the scale of shortages that obtained in February last year. The survey showed that more than one in 10 of the English work forcethat is, 2.4 million workerslacked the skills that they need to do their jobs as well as they should be done. One third of employers had no training plans to plug that skills gap, and one fifth of job vacanciesabout 135,000 postsremained unfilled because of lack of appropriately skilled applicants. The study also found that poor basic skills cost a typical business employing 50 people about 165,000 a year, and that employers in London were the least likely to offer employees adequate training.
	The CBI and the TUC recently estimated the cost of the skills crisis to the British economy at a staggering 10 billion a yearthat is, about 170 for every man, woman and child in the country. The Government's skills strategy document of June 2003 conceded that our skills gap had remained stubbornly persistent. The problem did not arise over the past seven years, but it has not been adequately addressed in that time. There is not much point in prating on about what happened in the 1980s and 1990s, because the remorseless demand for a greater competitive edge in this country over the past seven years is there for all to see. Global economic forces mean that we live in a more competitive economy than was the case even 20 years ago. I suggest therefore that it is more urgent for this Government even than for any of their predecessors to get a real grip on closing the skills gap with our competitors.

Kelvin Hopkins: I am following the hon. Gentleman's speech with interest. We are all concerned about the skills gap, and he has pointed out that, although companies are desperately keen to employ more skilled workers, they are not prepared to train them. Does not that mean that the state must play a much greater role in ensuring that skills are developed, either by offering training itself or by compelling or inducing companies to do that?

David Ruffley: I shall not be tempted down that path. My party is inveterately free-market, which differentiates it from the hon. Gentleman's. We believe in voluntarism and not the heavy hand of the state. Most of the time, when the state gets involved in such matters, it does a pretty lousy job and messes things up. That is especially true when it comes to work force issues.
	One of the great successes apparently celebrated by the present Prime Minister and Chancellor of the Exchequer is the supply-side revolution of the 1980s and early 1990s. That success is not in doubt and is not contentious. It has been adopted by the Labour party as part of an economic consensus, although I agree that the social responsibility that employers should display voluntarily is not as evident as it should be.

Kelvin Hopkins: Is not it obvious that voluntarism does not work? The most successful economies, even in the capitalist world, are those where the state takes a strong lead in developing skills and investing in them. Taiwan is a good example of what might be called guided capitalism, as opposed to laissez-faire capitalism.

David Ruffley: The hon. Gentleman cites a selective example. The greatest job-creating economy on the planet is the US, which would not adopt a Taiwanese state-interventionist model. The facts support my choice of example, and not his. However, we can agree that some employers are not sufficiently responsible, even though they should understand that giving a work force the proper skills can be to their benefit and economic advantage.
	I resolutely stick to a voluntarist model. The results will always be patchy, and we will never attain perfection in this area of human and economic endeavour. I believe that the heavy hand of the state is to be avoided, and that the hon. Gentleman's prescription is not likely to be adopted by Ministers for the time being. The very simple reason for that is that they understand that that approach was tried in the 1960s and 1970s and that it failed, whereas the Tory economic model of the 1980s and 1990s succeeded. That success laid the foundation for the economic growth currently enjoyed by our economy. We call that the golden economic legacy of my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke). The current Chancellor has not tried to unwind or reverse that legacy, which is eloquent testimony to its success. The

Mr. Deputy Speaker: Order. The House is enjoying these exchanges, but they are marginal to the content of the Bill. I hope that we can draw a line under them at this point.

David Ruffley: That is not the first time I have been called marginal, Mr. Deputy Speaker. I had no intention of trying your patience, but I was led astray by the interestingalthough now apparently irrelevantinterventions by the hon. Member for Luton, North (Mr. Hopkins). Even so, I hope that we have demonstrated that there is some common cause between us.
	Recent figures show that output per hour worked in the US and Germany is about 25 per cent. higher than in this country. In France, the figure is more than 30 per cent. higher. The percentage of the British work force qualified to intermediate skills levelthat is, apprenticeship, skilled craft and technician level is low, at 28 per cent., compared with 51 per cent. in France and 65 per cent. in Germany. That is the measure of the skills gap.
	The complexity of the current system was outlined by the Paymaster General and by my hon. Friend the Member for Chichester (Mr. Tyrie). It is the second aspect of training and the labour market addressed in the Bill, which, in fairness, does something to effect sensible reform. In the 2003 Budget, a wider review of support for 16 to 19-year-olds was announced, including financial incentives to participate in education and training. In March 2004, the Government published Supporting young people to achieve, and no one can fault the ambitions set out by Ministers in that document.
	The Government, we were told,
	is committed to ensuring all young people reach the age of 19 ready for higher education or skilled employment.
	We heard about the Government's
	ambition for improving skills of young people
	and that the
	aim of this review is to ensure all young people aged 1619 have the support . . . they need.
	Those all fall into the category of motherhood and apple pie, but did the Government really do enough in the preceding seven years to deliver those ambitions? I suggest that they did notfor one simple reason. No doubt through high-minded intention, the Chancellor of the Exchequer has introduced many versions of in-work benefit and support, starting with the working families tax credit in 1997. With various tweaks and incarnations, the child tax credit and the working tax credit are now the two main in-work benefits. There are education maintenance allowances and a long catalogue, to which reference has already been made, of new initiatives.
	The Bill speaks to the position of unwaged trainees, which is especially worthy of note and, in the panoply of changes, one of the more worth while. One of the key changes will be to the current rules, where for child benefit and child tax credit purposes, anyone under the age of 16 is treated as a child, and a young person aged 16 or over but under 19 is treated as a child if they are in full-time, non-advanced education. The Government believe that the current definition of a child in child benefit and child tax credit for 16 to 19-year-olds distorts choice, especially for those who are more likely to take the vocational route. Under the current system, they may be forced to take a course at a college rather than with a training provider, because of the existing differentialthe additional financial support that is available. In the Bill, the Government have committed to extend child benefit and child tax credit to the parents and carers of unwaged trainees.
	We support the proposals that I have just outlined; we also support the proposals on the age-19 cut-off. I shall not detain the House on those, but the regulations published on 10 January reveal that the Government have decided to use the age of 20 as the initial cut-off point, leaving open the option for a change in future if it is deemed necessary.
	I close with some criticisms, which are, I hope, well judged, of the wider welfare and training policy that the Government are offering the country, in the light of the sensible changes in the Bill that I have conceded. In 1997, Labour promised to reform welfare and spend less on wasteful social security while maintaining spending on the sensible parts of what was then the social security budget but is now the budget of the DWP, such as pensions. One would have to be a complete idiot to say that cuts in social security should include the basic state pension and other pension benefits. However, the Opposition believe that, as the James review will make clear in the coming weeks, there is much useless, irrelevant and redundant expenditure in the DWP budget.
	Welfare spending has increased by nearly a fifth in real terms since 1997, in clear defiance of the Prime Minister's promise that that would not happen. While spending on welfare and education has risen, recent research from the Library shows that the number of young people aged 16 to 24 who are not in employment or education has risen by 36,000 since May 1997. That may not be a huge increase, but it is not an impressive statistic. The figure would have been going down since 1997 if Labour's promises had been delivered. More than half the young people who are not in education or workabout 670,000are defined as economically inactive: they are not actively seeking work. Despite the Labour party's rhetoric about prioritising education and skillswe remember that great slogan, Education, education, educationthe CBI has reported that one in three companies has to provide remedial training for school leavers who have not sufficiently mastered reading, writing and arithmetic. That shames us all, and the Government would be well advised, while making sensible changes in Bills such as the one that we are debating today, to look at the basic skills of reading, writing and arithmetic in primary, middle and upper schools, as those skills precede vocational training. The statistics, however, are worrying.
	My hon. Friend the Member for Havant (Mr. Willetts), the shadow Secretary of State for Work and Pensions, has rightly taken every opportunity to criticise the Government for reneging on their promises to reduce benefit payments. We will say something about that, as I have suggested, in the James review. Forensically and with great numerical distinction, the Conservatives have highlighted the failings of the Government's new deal programme, particularly for young people. My hon. Friend recently commented:
	Despite the billions of pounds that Labour have spent on the New Deal, there are now more than 1.1 million young people who are neither working nor studying nor training. This is the highest figure since Labour came to office. After all of Labour's talk about helping the young unemployed, why are so many young people being left behind?
	I do not dispute the Government's good intentions, and we are not suggesting that Ministers are acting in bad faith. However, they are failing to deliver on the new deal, as on many other things.
	It is the policy of Her Majesty's Opposition to tackle the crisis in basic skills initially, although not exclusively, in schools. Pupils should be able to specialise in meaningful skills education as early as 13 if they so wish. Also, they must achieve higher standards of reading and writing at a very early age. Our policy of entrusting school heads and governors with more freedom to improve their schools will deliver genuine improvements, giving schools more freedom over their financial management. In the 1990s, we saw the benefits of that policy in grant-maintained schools, which achieved better results because teachers in local schools knew how the money could best be spent to lever up standards. We will introduce other measures to improve the quality of teaching, including, for example, axing unnecessary paperwork. Since 1997, the average school head has received 12 pages of bumf from the Department for Education and Skills every working day. We would cut that material, and we would also reduce interference from appeals panels if a head wished to exclude an unruly pupil. There is therefore a package of measures at the heart of our efforts to improve training.
	We will also reform welfare to give more practical help to unemployed young people. We will scrap the new deal, which has been an expensive failure. Only about a third of people who complete the programme find a sustained job and most of them end up back on benefits, according to the new deal summary statistics issued by the Department for Work and Pensions in December 2004. Statistics show that most people who find work while on the new deal would have found jobs regardless of that Government project. We will replace it with Work First, a policy that allows private, voluntary and charitable providers to deliver employment advice more effectively. There is clear evidence from home and abroad that contracting out employment services to independent providersbut not in the lily-livered way espoused by members of the new Labour hierarchyachieves much greater success at lower cost.
	In conclusion, the Opposition welcome the sensible parts of the Bill, but we do not welcome the Government's record over the past seven years, as it has let down children and young people. More can be done to help them achieve their ambitions. It is vital to create a highly skilled work force that can adapt to the challenges ahead, including a viciously competitive global economic environment. It is not an option to say, Stop the world we want to get off. It behoves politicians from all parties to have much greater ambitions for our young people. They are our future.

Frank Field: I apologise for not being here for the opening speeches, but I shall in no way apologise if I repeat some of the themes that those on the Treasury Bench have outlined. Those themes are part of the celebration that we are having today. I wish to make two points in my short contribution. The first is to congratulate the Government, and to celebrate with them, on the achievement that the Bill symbolises. Secondly, as we are now into manifesto time, I want to suggest how some of the money might be even more effectively spent than it is currently.
	To turn to the celebration, we need only cast our minds back to the last time a Labour Government introduced a child benefit Bill. They had revolts on their hands, faced chaos and withdrew the Bill. There was a major leak of Cabinet minutes and, under pressure, the then Government reintroduced the Bill and the introduction of child benefit followed. What a difference between then and today. There is now such agreement not only in the House but in the country on the importance of child benefit that, try as they may, even the Opposition do not have a case to make against the Government's proposals.
	We therefore celebrate the transformation in parliamentary views on child benefit and the extension of child benefit to an older age group to reflect the important changes that are necessarily occurring in education and therefore its interrelationship with the labour market. We also celebrate the fact that, at long last, society is beginning to realise that raising children is a huge cost that is disproportionately borne by a small minority of the population at any one time. As my hon. Friend the Member for Hartlepool (Iain Wright) said, we all have a huge vested interest in making sure that parents do the very best possible job of raising the next generation and the people who will pay our pensions. If we cannot be interested for the right reasons, we can be interested out of self-interest.

David Laws: The right hon. Gentleman will no doubt be aware of the paper that the Government issued last year that talks about a vision for supporting young people. It talks about support being dependent on household income and appears to suggest that there may be a shift from child benefit to a more means-tested system. Does he have any concerns about that?

Frank Field: Indeed, I have concerns. The only rationale for the tax credit only side is to put it into place and then start dismantling the universal side of the welfare state. Clearly, one needs to be vigilant on this issue, but even though one must be concerned, that is not what is before us today. The Bill is about extending child benefit, so it is a day of celebration.
	The hon. Gentleman is right to talk about what might be done in the future and what might be done about support for older children, but I want to consider younger children and our support for mothers. Today, we are also celebrating the influence that the most impressive Back-Bench Member of Parliament ever had on policy. I refer to the influence of Eleanor Rathbone, because when she rose to talk about child benefit, she did not receive a great deal of support from her colleagues. She talked about the importance of endowing motherhood and I fully understand, politically, why she let the campaign move from motherhood to family allowances and the transition to child benefit.
	Like my hon. Friend the Member for Hartlepool, my hon. Friend the Member for Birmingham, Hodge Hill (Mr. Byrne) made a significant point about the importance of antisocial behaviour in our constituencies. Antisocial behaviour cannot be divorced from the way in which young children are nurtured. Parenting skills have been lost in many families in our constituencies, which is why Sure Start is important and we must redouble our efforts on that front. We first introduced child benefit, or more importantly family allowances, in a world in which mothers did not work, certainly in the early years of a child's life. It is now clear that most mothers must work because of economic pressures, so I wonder whether we have the right balance between support for children in the first 19 years of their lives and that in the first two years.
	When I examined the taxpayers' resources that are provided for children, I was surprised. If we add child benefit, the child tax allowances and the extension to 19 under the Bill, we are talking about a budget of 100,000 per child, which shows that a revolution has taken place in my lifetime from the support that existed. Given that we are in manifesto time and many, if not most, young mothers must go back to work, against their natural instincts, to keep their family finances together, might there not be a better way of spending some of that 100,000?
	I hope to engage the services of the Clerks so that I can table an amendment on Report to provide that mothers could opt to take a quarter of that money tax-free during the first two years of their children's lives. That would mean that, if they did not want to work, they would not have to. Such a measure would be important for the welfare of our society because it would raise the financial position of mothers to a level that most women in my constituency could not command in the labour market. We would thus say that motherhood is financially more important than any other job that they could get, and I guess that they would opt for the payment. The scheme would not only interest women who have only the option of low-wage jobs, because it would allow women on higher pay to choose to return to the labour market later than at present. That might greatly influence increasing the importance of the nurturing of children, which is starting to be lost in our society.

Kelvin Hopkins: Does my right hon. Friend have any statistics to show the number of women with young children who would wish to stay at home and look after them if they were financially able to do so?

Frank Field: No, but given that the Government are rightly into choice, we would not have to worry about numbers. We would make the scheme an option and find out how many people went for a tax-free income of 25,000 during the first two years of their children's lives and how many were not interested and wanted to receive their child benefit and tax payments over the first 19 years of their children's lives. We are normally out of tune with what the voters want, so we might be surprised by the response.
	I repeat that this is a day for real celebrations, certainly on the Labour Benches and hopefully among Opposition Members. It marks a transformation of the way in which taxpayers are called upon to support the minority who care for and nurture our children. However, the Bill will rightly increase the sums involved by covering all those with children up to the age of 19. When I asked the House of Commons Library about our investment in children up to the age of 19, I did not believe that it would be anywhere near 100,000. The fact that we are now discussing big moneythank goodnessopens up options for the first time. Do we want everyone, in a ration-book way, to have to draw money equally over each year of their children's lives, or should we use the Bill to offer real consumer choice to people who wish to draw down some of the money in the earlier part of their children's lives so that they can stay at home during that time and go to work when their children are involved in Sure Start, at nurseries or safely at school? This is a moment for real celebration.
	I end as I began. Consider the change in opinion over time. The last time a Labour Government introduced a child benefit Bill, a huge, rocketing political debate took place in the country about whether we could have it, whether we should have it and whether it was an awful Bill transferring money from men's pockets to women's purses. Under pressure, the Government withdrew the Bill for a while. Fortunately, once the Cabinet minutes were published, the Government got back their courage and we got child benefit. Back in 1976, who would have thought that we would have another Labour Government introducing another Child Benefit Bill? Child benefit is now so accepted in the country as a necessary part of family support that most hon. Members are hard put to find serious reasons to disagree with what the Government are doing.

Mark Francois: I am pleased to sum up for the Opposition after an interesting debate. It is a pleasure to follow the right hon. Member for Birkenhead (Mr. Field) who, as the whole House acknowledges, always speaks with great authority on these matters. I am glad that he joined us in the debate today and look forward to referring in detail to his remarks.
	I confess to a sense of dj vu. Just before Christmas, my hon. Friend the Member for Chichester (Mr. Tyrie) and I faced the same two Ministers across the Dispatch Box to debate Second Reading of the Commissioners for Revenue and Customs Bill. Here we are, just after the return from the recess, debating further Treasury legislation, this time on the subject of child benefit. Before I come to the details of the Bill, I shall say a few words about the contributions to the debate.
	The hon. Member for Wolverhampton, South-West (Rob Marris) spoke with his usual sense of humour and mentioned the history of some of the issues in his constituency. He advanced an argument about the problems of simplification and took as an example the Child Support Agency. I shall correct him gently, if I may. The problem with the change from CS1 to CS2 was not that the change was wrong in principleit was rightbut that the computer system purchased to deal with the change was deficient. The Government are trying to rectify the situation. An IT failure, rather than simplification itself, lay at the heart of the problem. He made a number of detailed suggestions for amendments to the Bill, which I saw the Whip on duty at the time noting feverishly. Knowing a little about how this place works, I congratulate the hon. Gentleman on volunteering for the Committee next week.
	The hon. Member for Yeovil (Mr. Laws), who spoke for the Liberal Democrats, supported the Bill in principle. He pointed out that it could affect 160,000 young people. He agreed with us about the lack of clarity in the Government's figures relating to the cost of the measure and how they will measure the benefits that it produces. As I said in an intervention in his speech, it is ironic that a Treasury Bill, of all things, lacks accuracy on financial matters. It used to be said in some quarters that the traditional spending Departments were often bursting to bring in spending Bills and the role of the Treasury was to attempt to restrain them. It now seems that the boot is somewhat on the other foot and that the Treasury often introduces spending Bills of its own. I simply ask as a rhetorical question who now guards the guards.
	The hon. Member for Birmingham, Hodge Hill (Mr. Byrne) made a thoughtful speech about his constituency, and spoke about skillsa common theme in the debateparticularly, in his case, in relation to science and technology. My hon. Friend the Member for Banbury (Tony Baldry) also stressed the importance of skills in a 21st-century economy and argued for clarity in the implementation of the new measures. He referred to his horizons being widened by participating in the debate, but I think that he helped to widen ours as well.
	We then heard from the hon. Member for Hartlepool (Iain Wright), the newest addition to the House, who spoke mainly about his own constituency and how the Bill might affect it. It was the first time that I had heard him speak in the Chamber, but I hope that he will not mind me saying that, having heard him today, I now look forward to hearing him again.
	We also heard from my hon. Friend the Member for Bury St. Edmunds (Mr. Ruffley). He too stressed the importance of skills in a modern economy and particularly praised the valuable work under way in a number of schools and colleges in his constituency to help to foster that. I very much agreed with him that a key to all of this is to get the fundamentals of education in our schools right, because young people will be playing catch-up for the rest of their careers if they have not been adequately educated by the time that they leave school in the first place. I hope that there will be agreement on both sides of the House about the importance in principle of doing that, even if we disagree about the precise methods for implementing it.
	I also very much agreed with the intervention of the right hon. Member for Birkenhead on tax credits. That is something that the Ministers here today have debated before, but he gave some relevant examples of where there are problems in the system. To be fair to the Paymaster General, I think that she acknowledged that from a sedentary position, so I hope that it will be possible to bring about changes in due course. The right hon. Gentleman also hinted at introducing an amendment on Report, which we all picked up on, and we should look forward to debating that in due course.

Rob Marris: Put him on the Committee.

Mark Francois: I suspect that that may yet happen too.
	My hon. Friend the Member for Chichester has already explained to the House that the Opposition do not oppose the Bill in principle and that we do not intend to seek to divide the House on it tonight. However, we will have some specific questions to ask in Committee about particular aspects and the attendant draft regulations, some of which I should like to touch on.
	The Bill's genesis goes back several years, arguably to a report by the social exclusion unit in 1999. That then evolved over time into the Government's more recent consultation document, Supporting young people to achieve, which was published last year alongside the 2004 Budget. Following on from the results of that consultation, the Bill extends the scope for those qualifying for child benefit in essentially two respects: first, by making it available to the families of unwaged trainees on named programmes of Government-supported training; and, secondly, by making it available to the families of 19-year-olds completing a course of full-time education or unwaged Government-supported training that was started before their 19th birthdayin other words, by extending the cut-off that currently operates at 19.
	In themselves, those are not particularly contentious measures, but the Bill is not without fault. To begin with, it does little to reduce the overall complexity in the benefits system, which was laid out in some detail by my hon. Friend. The Government's social exclusion unit, in its 1999 report, Bridging the Gap: New Opportunities for 1618 Year Olds not in Education, Employment or Training, had already made the point that the system of financial support for young people was extremely complex, so the Government themselves have admitted that for some years.
	If we then come forward to today, the Bill's wonderfully entitled Supplementary partial regulatory impact assessment, published alongside the draft regulations just this week, effectively reiterated the complexity of the current system and then in paragraph 20 stated:
	Evidence presented to the Review showed that vulnerable young people lacked understanding of their entitlement.
	We are therefore faced with a system that is already so complex that very few people understand it in detail and, in particular, there is a lack of understanding among those people to whom the system is directly meant to apply. I am not sure that the Bill helps to rectify that as best it might.
	Moreover, the Government's consultation document described the proposed changes in the Bill as interim measures, in lieu of a more fundamental review of the system of financial support for young people. The outcome of the review, as predicted by the House of Commons Library briefing note that accompanies the Bill, will be set out in the 2005 Budget. That is the Library's assumption, but could the Minister in his reply confirm that it is still the Government's intention to reveal their longer-term strategy on the whole issue in the 2005 Budget? We have some elements of the package, but we do not have the package in toto, and it would be helpful to know when we might receive it. I am not asking him to betray the date of the Budget, although that would be nice. As a planning assumption, the Budget announcement will be about two months today, and the Government therefore appear to be proposing to introduce an interim measure today that, according to their own draft regulations, would not come into force until at least April 2006, but which they are effectively planning will be superseded in two months' time in any event.

Rob Marris: The hon. Gentleman cited the Library brief, but with due respect, I think that he slightly mis-cited it. Page 16 states:
	It is expected that the Government will announce further details of its long-term vision of financial support for 1619 year olds in the 2005 Budget.
	I draw his attention to the words further details. The Library does not say that it is expected that the Government will announce their long-term vision, but refers to further details.

Mark Francois: I have two things to say to the hon. Gentleman. First, the Government's approach has been very disparatewe have had the information very incrementally. The Economic Secretary will appreciate that we are asking for the final package and I am seeking to tease out of him whether we are likely to receive that in the 2005 Budget. Perhaps he can throw some light on that point. Secondly, as the hon. Member for Wolverhampton, South-West chose to intervene on me, I hope that he will not think me uncharitable in saying that he was rather pushing the envelope in making his remarks about driving licences. I say to him charitably that we debated the Road Safety Bill yesterday, not today.
	For the record, I appreciate that part of what the Government are seeking to do is to correct an anomaly in the already very complex system whereby parents of those aged 16 to 19 in full-time non-advanced education receive child benefit, while parents of those in the same age group who are unwaged training do not receive it. We can see what the Government are seeking to achieve, but is there not at least a practical argument for cutting to the chase and simply waiting two months for the overall answer and the entire package, if the Government are likely to come up with it, and to move forward from that stage?
	The Opposition also have concerns about the timings for dealing with the Bill. This may be a relatively small Bill, but it is nevertheless an important one, not least to those who stand to receive the expanded benefit. That being the case, the Bill has many of the hallmarks of a rush job. First, it is largely dependent on a set of subsequent regulations that were issued only on Monday, along with the now famous regulatory impact assessment, and which did not allow much time for consultation with interested parties, at least on the regulations themselves, which form the heart of the Bill. Secondly, the Bill is now to be hurried into Standing Committee as early as Tuesday next week.
	Why that headlong rush, not least for a measure that is not scheduled to be implemented for more than a year in any event? The conclusion has to be at least in part that this is an electioneering measure that the Government are desperate to get on to the statute book prior to an expected election in May 2005.
	In addition, I ask the Economic Secretary what the Bill will do for the so-called missing million among our young peoplethe more than 1 million people mentioned by my hon. Friend the Member for Bury St. Edmunds who are not in employment, education or training. The latest figures, from the quarter August to October 2004, which were published by National Statistics as recently as December, show that the number of under-25s unemployed and not in education or training rose by 36,000 on the previous quarter, while the number economically inactive and not in education rose by 5,000an increase of some 41,000 to give a new overall total of 1.118 million which is well over a million. That represents a sixth of our young people under 25, and has been described by the shadow Secretary of State for Work and Pensions, my hon. Friend the Member for Havant (Mr. Willetts), as a lost generation. It is not clear what this Bill, which is a relatively minor measure, will do to seek to address a problem that now exists on that scale and is a definite blot on the Government's record.
	In reality, the Bill is yet another element in the Brownite agenda. It is not unworthy in its own right, but it has become just a very small part of a much larger gamethe struggle between the Chancellor and the other spending Departments, including the Department for Work and Pensions, for control of the Government's social policy agenda in the run-up to the election. It is meant to be part of Brown's Britain, as opposed to Blair's Britain, Milburn's Britain or even Johnson's Britain. Unfortunately, the Bill that is being introduced today by this now obviously divided Government is a benefit Bill, but it is for the Chancellor's benefit rather than anybody else's.

John Healey: We have had a good debate this afternoon. Although the Bill is short and straightforward, it paves the way for significant improvements in the support that we provide for young people who continue in learning beyond the age of 16. The Government are determined to offer that support to allow all our young people to realise their potential, regardless of their financial circumstances. I am glad that the Bill has received a widespread welcome from organisations that take an interest in the field and, as I understand it, from both major Opposition parties, which have decided not to oppose it this afternoon.
	As my right hon. Friend the Paymaster General has explained, the Government are committed to ensuring that all young people reach the age of 19 ready for higher education or skilled employment. Skills are important for the life chances, employment prospects and earning potential of individuals, but they are also important for the flexibility, productivity and competitiveness of our British economy. The Government are interested in all those matters. Intensifying international competition, accelerating technological change and changing patterns of consumer demand are all likely to increase the demand for higher level skills. By 2010, it is forecast that 80 per cent. of new jobs will require high or intermediate levels of skills and that 95 per cent. of them will require at least a level 2 qualification.
	That is why young people moving into the work force must have a firm, strong skills foundation on which they can continue to build throughout their working lives. The Government have already taken steps to broaden the opportunities available to young people, and that is why we are reforming the curriculum and range of learning in England. To support that strategy, we must remove the financial barriers to young people staying in education and training after the age of 16, which is why the Chancellor announced the review of financial support for 16 to 19-year-olds in the Budget 2003, which was followed by the publication of the report Supporting young people to achieve: towards a new deal for skills alongside the Budget 2004.
	Before I had the privilege of serving in the Treasury, I served as Minister with responsibility for adult skills in the Department for Education and Skills. In February 2002, I visited the excellent further education college in the constituency of my hon. Friend the Member for St. Helens, North (Mr. Watts), where I met him, the principal and the student support officer. My hon. Friend was the first to raise with me the issues addressed by the Bill. He pointed out that families in St. Helens at that time were refusing to allow their children to enrol on work-based training schemes. Such families would lose benefits if their children enrolled, and the rules often led to family disputes over money. He also made it clear that young people refused to accept work-based schemes, even if such schemes were the best options. Many hon. Members have subsequently raised similar points, but the process started with my hon. Friend.
	In his contribution, my hon. Friend the Member for Wolverhampton, South-West (Rob Marris) underlined the historical and future importance of vocational skills in his region and recognised the value that the changes in the Bill will provide for young people in the west midlands who want to pursue training that is, at least initially, unwaged.
	My hon. Friends the Members for Wolverhampton, South-West, for Birmingham, Hodge Hill (Mr. Byrne) and for Hartlepool (Iain Wright) described the skewed educational choices that young people are sometimes forced to make because of their family's financial circumstances. All hon. Members who have examined the issue closely or who have discussed the matter with local training providers will recognise the present problem. In my home town, Rotherham, we have a good learning provider called Morthyng. Last year, it supported some 1,500 people back into learning, 369 of whom were between the ages of 16 and 21. The company tells me that, last year, 55 young people rejected, at age 16, offers of work-based training places precisely because of the family loss of child benefit and tax credits, and in preference tried to take up college places because of the support that they would receive. The chief executive, Chris MacCormac, told me that, with the new Bill, the company estimates that it can support a further 55 to 90 young people a year in entering learninglearning that suits their needs, that will reduce drop-out, improve achievement and reduce the numbers of those not in employment, education or training locally by 10 per cent. year on year.
	The story is the same for the excellent further education college in my constituency, Dearne Valley college, which draws students from Barnsley, Doncaster and Rotherham local authority areas. Barnsley and Doncaster were education maintenance allowance pilot areas; Rotherham was not. The college principal, Sue Ransom, reports that the impact of the EMA pilot in the Dearne area was significant. During 200203, it resulted in a 15 per cent. increase in the retention of EMA pilot students compared with non-pilot area students, and an increase of 26 per cent. in the achievement of the EMA pilot level 1 students over non- pilot students. My hon. Friend the Member for Hartlepool made similar points about his constituency.
	That, in part, is the answer to the question asked by the hon. Member for Yeovil (Mr. Laws) about the likely behavioural effects of these measureswhether they will encourage people to stay on in education or take up unwaged training options.

David Laws: Will the Minister give way?

John Healey: I will give way on that point, and then I should like to turn to the other contributions to the debate.

David Laws: It may be that the Economic Secretary is coming to this point. Will he clarify how many of the 80,000 unwaged trainees' families will receive child benefit and the child tax credit, and how many may not receive it because of the way that the Government have defined the entitlement?

John Healey: I am indeed coming to the general point made by the hon. Gentleman and by the hon. Member for Chichester (Mr. Tyrie) about what they see as the weakness in the available information that we have been able to set out in the regulatory impact assessment.
	I am happy to follow the hon. Member for Rayleigh (Mr. Francois). He made a mostly measured and serious winding-up speech, which I welcome. He noted some of the detailed matters that he intends to develop in Committee, and we look forward to that. I also welcome the declaration by the hon. Member for Chichester that the Conservatives will not oppose the Bill. The Paymaster General and I are rather accustomed to his style of debate. His speeches tend to be a series of detailed questions and narrow debating points. We hear nothing from him about what his party would do or how it might pay for its policies. Perhaps he has not recently had a conversation with his boss, the shadow Chancellor, who has made it clear that his party, in government, would spend and invest less of the national income in public services, that it would cut 35 billion from the spending plans that we have laid out up to 2008, and that it would offer no protection for learning and skills activities. Learners and learning providers will face cuts, and that includes the areas covered by the Bill.
	The hon. Member for Chichester also mentioned age limits, a point raised by several other Members. I understand the concerns of hon. Members and organisations cited this afternoon about financial support for young people aged over 19. However, from the Government's point of view it is necessary to decide on a sensible point at which it is no longer appropriate to pay support to a young adult through the parents. We have separate arrangements to support adults in gaining skills and qualifications. The Government's view is that someone aged over 20 should come under the adult arrangements, but we will keep that under review and consider it in light of the initial reforms that we are setting out today.
	I come to the information that is available and the confidence that we can have about any cost-benefit and behavioural effectsa point that was stressed by the hon. Members for Chichester and for Yeovil. I have to tell them that we all share the problem that there is a sparsity of information available about unwaged traineesthe group of people we are most concerned with in this context. They are generally in small groups and are not easy to pick up in generalised surveys. Moreover, no one has specific responsibility for collecting data on them and there is no common source of data. Consequently, the RIA is a reflection of the best information that we have. As we improve the information we will certainly share it with members of the Committee and other Members.
	I am pleased that the hon. Member for Yeovil gave a general welcome to the Bill. He said that it would be of benefit if the Department for Education and Skills was leading on it. I could ask him why he, rather than the hon. Member for Harrogate and Knaresborough (Mr. Willis), is speaking for his party. On his main serious point of principle, I can assure him that we will, in the long term, rationalise the system of support for young people. That is precisely what was set out in the joint Treasury-DFES report alongside the 2004 Budget. As he says, the Bill is something of a milestone towards that.

David Laws: rose

John Healey: I had better press on, if the hon. Gentleman does not mind. I have already taken one intervention from him and I am keen to deal with the contributions of other Members.
	My hon. Friend the Member for Birmingham, Hodge Hill clearly explained the decisions faced by young people in his constituency and how they may be penalised for taking up the option of unwaged training, as well as setting out the vision and imperative to raise skills levels in the economy and the danger to us as a nation if we do not.
	I am glad that the hon. Member for Banbury (Tony Baldry) joined the debate. He cited China as a cautionary tale for us all, and eloquently made the point that increasingly in future those without skills will find that they are less securely employed and have their job and income prospects reduced. As for information, advice and guidance, the Department for Education and Skills has been looking closely at that issue and he can expect some indication of its thinking in the forthcoming youth Green Paper.
	My hon. Friend the Member for Hartlepool spoke up clearly and strongly for his constituency. He recognised the increases in child benefit under this Government since 1997. I have to tell him that in April they go up again to 17 for the first child and 11.40 for any subsequent children. He also mentioned the expansion of modern apprenticeships. He is rightthe number of young people in modern apprenticeships has more than tripled since this Government came into office.
	The hon. Member for Bury St. Edmunds (Mr. Ruffley), who is again in his more accustomed place on the Front Bench, offered us a wide-ranging speech from which I took a couple of specific points. I congratulate Mr. Oliver and his staff at Stowmarket high school on their status as a new technology college. They are clearly making great strides under the Government's education policies, and I welcome that. He argued that the seriousness of the skills gap means that there is a role for the state in helping to fill it and a role for employers in making a greater contribution and being more socially responsible.

David Laws: rose

John Healey: I will give way one last time.

David Laws: I am grateful to the Economic Secretary for giving way in these last few minutes. I appreciate that he is trying to be helpful, but there is major uncertainty over one of the big issues in the Bill. The Government are saying that 80,000 young people are in unwaged training, but that only those on Government supported training schemes will get assistance through child benefit. How many of the 80,000 will have access to the additional benefits?

John Healey: There are 80,000 young people on unwaged Government-supported training schemes, and that is the number of young people who are potentially eligible for the measures that we are considering.
	Let me deal with the comments of my right hon. Friend the Member for Birkenhead (Mr. Field). My right hon. Friend the Paymaster General and I look forward to hearing the advice that he receives about possible amendments on Report. He was right to celebrate not only the extension of child benefit for which the Bill provides but, as he put it, the transformation of parliamentary opinion on child benefit. He knows as well as anyone that part of the ambition and purpose of a progressive Government is to develop not only progressive policy but a consensus that will support that policy and render its dismantling more difficult in any future change of Government. I hope that he will perceive the support for the Bill from hon. Members of all parties as a further small step towards that.

Andrew Tyrie: I sometimes wonder whether the Opposition are the only people who read regulatory impact assessments

Rob Marris: Excuse me!

Andrew Tyrie: And one or two more attentive Labour Back Benchers. Throughout the debate, I have asked for the Government's estimate of the total number of people who will be brought into training as a consequence of the measure. I still have not received an answer. That is the most basic information that we need if we are to spend more money on training. What is the answer?

John Healey: I explained earlier the precise problems that we experienced in getting accurate information to assess the behavioural effects with any confidence.
	We expect to debate the more detailed points that were made this afternoon in Committee. However, I hope that the debate has made it clear that the Bill is modest but important. It reinforces our commitment to vocational education as equal in status to academic education. It removes barriers that may restrict or distort the choices of education and training that young people make. It encourages young people to choose learning that is best suited to their interests, aspirations and aptitudes, rather than basing the decision on the amount of financial support available. It increases the support that we offer to 16 to 19-year-olds as a step towards achieving our ambition for all young people to stay on in education and training until the age of 19.
	I commend the Bill to the House.
	Question put and agreed to.
	Bill accordingly read a Second time.

CHILD BENEFIT BILL (PROGRAMME)

Motion made, and Question put forthwith, pursuant to Standing Order No. 83A(6),
	That the following provisions shall apply to the Child Benefit Bill:
	Committal
	1.   The Bill shall be committed to a Standing Committee.
	Proceedings in Standing Committee
	2.   Proceedings in the Standing Committee shall be brought to a conclusion on Thursday 20th January 2005.
	3.   The Standing Committee shall have leave to sit twice on that day.
	Consideration and Third Reading
	4.   Proceedings on consideration (so far as not previously concluded) shall be brought to a conclusion two and a half hours after their commencement.
	5.   Proceedings on Third Reading (so far as not previously concluded) shall be brought to a conclusion half an hour after their commencement.
	Programming Committee
	6.   Standing Order No. 83B (Programming committees) shall not apply to proceedings on consideration and Third Reading.
	Other proceedings
	7.   Any other proceedings on the Bill (including any proceedings on consideration of Lords Amendments or on any further messages from the Lords) may be programmed.[Margaret Moran.]
	The House divided: Ayes 312, Noes 183.

Question accordingly agreed to.

CHILD BENEFIT BILL [MONEY]

Queen's recommendation having been signified
	Motion made, and Question put forthwith, pursuant to Standing Order No. 52 (Money resolutions and ways and means resolutions in connection with Bills),
	That, for the purposes of any Act resulting from the Child Benefit Bill, it is expedient to authorise the payment out of money provided by Parliament of any increase attributable to the Act in the sums which under any other Act are payable out of money so provided.[Jim Fitzpatrick.]
	Question agreed to.

PETITIONS
	  
	Radio Mast (Caersws)

Lembit �pik: This petition comes from residents of Caersws, Llanwnog and the surrounding area. It
	Declares total opposition to the 15.0 m radio mast located by Manthrig Lane in Caersws, whether it be used for TETRA, for which the application for Planning Permission was originally made on behalf of mmO 2 . or for any other communications purpose . . . which the Petitioners understand may be the intention of the mast owners (Crown Castle UK Ltd). It is the Petitioners' belief that all such technology poses a serious health risk to public safety, and that studies into this have been insufficient. The Petitioners further declare that there is an existing mobile phone mast on the corner of Manthrig Lane, thirty yards from the aforementioned 15.0 m mast, and that the latter is adjacent to both a Doctor's surgery and a home for patients with learning difficulties.
	The Petitioners therefore request that the House of Commons urge the Government to demand the dismantlement and removal of the Caersws mast for the reasons aforesaid.
	And the Petitioners remain, etc.
	To lie upon the Table.

Public Halls (Castle Point)

Bob Spink: This is a most important petition. At a time when the Government are forcing a ridiculous 4,000 additional houses on our already overdeveloped borough, we need more, not less, investment in infrastructure and public facilities. Our public halls belong to the people of Castle Point, not to the council, and must continue to be made available to all user groupsfrom Eddie Stacey's caring Phoenix club for the disabled to the spectacularly successful Rock-Ola rock 'n' roll club; from Richmond Hall mothers and babies group to George Hogbin's club for the blind. There are many worthy and hard-working councillors who are doing all they can to ensure that our access to our halls is guaranteed to all groups who use them, at no increased cost. I thank and congratulate each and every petitioner.
	The petition states:
	To the Honourable the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled
	The Humble Petition of Mr. and Mrs. Gibbs and others of like disposition sheweth
	That the closure of public halls in the borough of Castle Point would create difficulty for many groups that currently use them as meeting places, and would take the heart from the community.
	The Petitioners are particularly concerned for older people's groups and the blood transfusion service.
	Wherefore your Petitioners pray that your Honourable House shall urge the Government to enjoin Castle Point borough council to abandon any policy involving the closure of the borough's public halls.
	And your Petitioners, as in duty bound, will ever pray.
	To lie upon the Table.

EU OBJECTIVE 1NBSP;REGIONS

Motion made, and Question proposed, That this House do now adjourn.[Mr. Jim Murphy.]

Andrew George: I am delighted to have a good amount of time in which to explore the future of EU objective 1 regions. This issue is of concern to many Members, particularly those representing constituencies on Merseyside and in South Yorkshire, in West Wales and the Valleys, and in the Isles of Scilly and in Cornwall, where my own constituency lies. Indeed, I hope that the Minister will take on board the concerns of people living in Cornwall and the Isles of Scilly, a region whose needs I particularly want to emphasise. Unlike other existing UK objective 1 regions, it would clearly be eligible for a further round of objective 1 funding under the next programme. I hope that the Minister recognises that fact and will reflect it in her response.
	The purpose of this debate is to explore the UK Government's negotiations with other EU member states and the Commission concerning plans for the future of EU objective 1 regions in Europe as a whole, and in particular how those plans will impinge on the UK's existing objective 1 regions. The Minister is well aware of my concern, which is shared by all existing UK objective 1 regions and other regions that might be eligible for transitional relief under the next programme, after 2006. Under the Government's existing proposals, there is no certainty about the duration of the funding regime or the extent of funds available under future regimes.
	It will help the House if we remind ourselves of the EU's proposals following publication of the third cohesion report last July. Full objective 1 statusto be called convergence statusis proposed for regions that fall below 75 per cent. of the average gross domestic product of the EU 25. Cornwall and the Isles of Scilly, which has a GDP of 65.3 per cent., looks set to qualify as it is well below that level. Significantly, no other existing objective 1 region falls below that level. However, within convergence there will also be a lesser package for regions affected by the so-called statistical effect. It will perhaps be worth about two thirds of the value of current programmes. As I understand it, West Wales and the Valleys, Merseyside, the Highlands and Islands, and Tees Valley and Durham would qualify for that, according to currently available figures. However, Merseyside and Tees Valley and Durham could, with just small increases in their GDP, fall outside the scheme.
	As the Minister knows, there is also a smaller transitional package within objective 2, to be called competitiveness, for national growth regions. It is perhaps worth about half of the current programme value: South Yorkshire is currently eligible and Merseyside may become eligible in future. There is also the money via national Governments for all other parts of the UK in respect of national employment policy.
	The Government, of course, want to engage themselves in the question of the EU budget as a whole. The EU proposals are based on a budget of 1.14 per cent. of the member state's gross national income, but the UK and five other large contributors want a budget of just 1 per cent. I know that the Minister and her colleagues are pressing for that. It would leave a hole in the EU budget of about 115 billion. As the Minister knows, if the EU budget is reduced, structural funds are likely to be in the firing line.

Kelvin Hopkins: A simple way to reduce the budget would be to have a substantial cut in agricultural support under the common agricultural policy.

Andrew George: I have a great deal of sympathy with that. I believe that many aspects of the common agricultural policy are unjustifiable and I certainly hope that Ministers, as well as considering the structural funds, are looking into renegotiating the overall CAP budget. As I understand it, negotiations are carrying on in their usual form, so I presume that the whole budget is in the air. The previous agreement on the future of the CAP was hard fought and hard won two years ago, but I agree with the hon. Gentleman that the CAP should be brought into the negotiations again now.

Candy Atherton: Are the Liberal Democrat Front Benchers making a pledge to match the Commission's proposals in the next manifesto?

Andrew George: The hon. Lady knows perfectly well that the Liberal Democrat shadow Chancellor has made a commitment to honour the eligibility of existing EU objective 1 regions in any future programme. That commitment was made only a few weeks ago, as I am sure the hon. Lady is aware. I am grateful to her for allowing me the opportunity to make that clear.
	The Government have made alternative proposals, which the hon. Lady supports. She is on record as agreeing with the proposition that the UK should take back the currently available money

Candy Atherton: I will always work to secure the best deal for Cornwall, and I hope that the hon. Gentleman will accept that. If the best deal comes from the British Government, I will fight for it. If it comes from the European Commission, I will fight for it on that basis, but we do not know where the best deal will come from. At the moment, however, the best deal on the table is coming from the British Government.

Andrew George: Unfortunately, the hon. Lady did not speak long enough for me to look up what she said in a debate on 15 June last year. As she knows, she supported the Government's proposals to repatriate funds to the UK. It is all very well her saying that she supports that proposalbut I can now quote what she said in the House on 15 June:
	I ask Ministers to think creatively over the next few months. I will be supportive of their plans to, so to speak, get our money back.[Official Report, 15 June 2004; Vol. 422, c. 730.]
	She cannot retract those words, which are on the record.
	The problem that I want to explore in this debate is that the promises and so-called guarantees that the Government have offered since the proposals were first put forward in September 2003the relevant consultation document was issued in June that yeardo not contain anything that provides the equivalent of the present funding extended to objective 1 regions. Moreover, they do not undertake to provide the funding over seven years, plus the two-year transitional period, that the EU makes available to the same regions.
	The hon. Lady supports the withdrawal of support. We need cast-iron guarantees that future funding extended to Cornwall will be equivalent to what is available under existing EU objective 1 programmes, and that that money will be available for the same seven-plus-two year period. In addition, the Government must assure us that Cornwall and the Isles of Scilly can continue the successful partnership that has been established. We must make the Government understand that Cornwall desperately needs and deserves that.

Matthew Taylor: When the Minister discussed these matters in one of the Committee Rooms, it turned out that there were no guarantees to be had, even though the Government had used that word previously. There were no guarantees that the funding would last as long as the EU money, or be equivalent in amountor, crucially, that it would be dedicated to expenditure in the area. The Government are unable to give such guarantees because they do not operate on a Budget time scale of seven years or nine years, whereas the EU can give a commitment for that length of time. Therefore, is it not clear that neither the Minister nor the hon. Member for Falmouth and Camborne (Ms Atherton) supports a deal of the same value or strength as the one that Cornwall currently enjoys? That is reflected in the fact that Labour local authorities around the country, and other Labour Members, have been far more critical of the Government on this matter.

Andrew George: I could not get to the meeting to which my hon. Friend refers because of the debate on hunting, but I have checked all the relevant correspondence, and what he says is true. For example, on 16 December I asked the Economic Secretary to commit himself to guarantee that places such as Cornwall and the Isles of Scilly would get the same level of funding over seven years as was available to them from the EU. In response, he promised that
	UK nations and regions will not lose out as a result of those reforms in Europe.[Official Report, 16 December 2004; Vol. 428, c. 1193.]
	What does the phrase UK nations and regions mean? The hon. Member for Falmouth and Camborne knows welland my hon. Friend knows it even betterthat Cornwall is a region for the purposes of Europe, but not for the Government's purposes. It is subsumed in the south-west Government zone. It may be called a region, but it is not treated as such. It has no integrity, and there is no community of interest. It represents bureaucratic convenience, and that is why I call it a zone. I fear that the expression means only that the money will go to Government quangos operating in Cornwall, and will not get to those who richly need and deserve it. All the partnership work that has succeeded so well over the past five years will be lost if the money is not given to the people on the ground in the objective 1 regions.
	These are matters of deep concern to many people. The Minister for Trade and Investment wrote to me on 15 November last year, and said that the Government's commitment to the UK's nations and regions meant that
	we guarantee that if our proposal were adopted, we would increase domestic spending on regional policy so that they did not lose out from our proposals. In all cases, the Government have committed that this will be additional to expenditure already planned.
	That is helpful and reassuring, but there is no commitment on the seven-year time frame. Of course there will be more money for regional aid as a result of the repatriation of funds, and it is reassuring that the money will, I hope, be disbursed in that way, but there is concern that the funds will not be used effectively in the areas that would be eligible for regional aid during the seven years from 2006.

Matthew Taylor: A further point is that European objective 1 funding is awarded on the basis of match funding from Government, so it has a value far beyond the amount to which the EU commits. However, there are no guarantees that the Government will provide the equivalent match funding, let alone that they will ring-fence it, for objective 1 areas such as Cornwall. Not only could the money be spent elsewhere in the region, it may actually not be spent at all. Technically, objective 1 might be matchedalthough there is no guaranteebut even if it is, there is no guarantee that the rest of the funding that it should bring will be provided. The Government are making a very different proposal, with none of the guarantees that the Minister likes to suggest.

Andrew George: I strongly endorse my hon. Friend's comments. The Government promise that countries and regions of the UK will not lose out, but there are serious concerns about the so-called guarantee. That not losing out is against an imaginary comparator, and there may in fact be a net reduction of between 55 and 65 per cent. in the current receipts. The guarantee is general, calculated across the UK; there is nothing specific to any area. It is not aimed at Cornwall, West Wales, South Yorkshire or anywhere else.
	As my hon. Friend said, there is no mention of how match funding will be handled. In the current objective 1 programmes for the UK, match funding doubles the value of EU structural funds. In Wales and Scotland, the extra money would go to the devolved Administrationsrightly sobut they are not required to spend it in a particular area, or even necessarily on regeneration.
	In England, distribution would probably be through the regional development agencies, and there is no guarantee that they would spend the money in the neediest areas or in those that currently have objective 1 status, nor that they would recognise the needs of those regions. The Government have not yet sufficiently explained how their plans for, or commitment to, a seven-year lifespan will be delivered.
	Let us consider the figures for the EU as a whole, and for the areas in the 10 accession countries that could have objective 1 status. Some regions of the Czech Republic, Poland, Bratislava in Slovakia, Slovenia, Malta and Cyprus will all receive objective 1 funds, yet their gross domestic products not only exceed that of Cornwall and the Isles of Scilly but exceed it to a large extent. That is an obvious injustice. The Government appear not merely to be signing up to, but to be the main protagonists for, a system whereby Cornwall would not receive objective 1 aid, yet regions in accession countries that are not as poor as Cornwall would benefit from such aid. That is wrong.
	If the Government want to stick to the 1 per cent. proposaland one can understand whythey could adopt the negotiating position that objective 1 regions will be determined purely on their merits, irrespective of whether they are in accession states. If the Government accepted that alternative, there would be a greater likelihood of equity in the system.
	When we have debates on the subject there is always a scramble to claim credit for achieving objective 1 status, and no doubt the notes that the Minister will read out later will say that it was all thanks to the Labour Government. I am grateful to the Government, who were among the large number of contributors to Cornwall's success in achieving objective 1 status. The then MEP, Robin Teverson, and the local authorities worked hard. The people of Cornwall marched and campaigned, and the quiet statisticians of Eurostat, Cornwall county council and elsewhere made the arguments for achieving technical change, particularly the statistical separation of Cornwall and its relatively wealthy neighbour, Devon. All those people made a significant contribution to getting the objective 1 status that Cornwall and the Isles of Scilly richly deserved.

Candy Atherton: rose

Andrew George: Here is someone else who made a contribution.

Candy Atherton: It was kind of the hon. Gentleman to remember that. He is right that there was broad coalition of people who campaigned to achieve objective 1 status for Cornwall. However, does he not agree that the critical thing in making it happen was the political push by the Government, and in particular the Prime Minister?

Andrew George: I was told by the regional chambera quangothat it was all thanks to them. Everyone's contribution was critical. The Prime Minister's support was important, but there was a partnership and no single contribution was more important than any of the others. Cornwall was clearly eligible as the poorest region in the UK, so it was a question of whether anyone was going to stand in the way of something to which it was richly entitled.

Llew Smith: Is the hon. Gentleman therefore saying that the introduction of objective 1 happened to coincide with the election of a Labour Government?

Andrew George: It did not entirely coincide. I agree that the prospect of success was greater with the change of Government, but I was involved in the objective 1 campaign before the 1997 election. Cornwall needed to achieve statistical separation to make its case for objective 1 status. Under the previous programme, we were entitled to objective 1 status, but we did not achieve the statistical separation for Cornwall to be considered as a NUTS 2 region.

Peter Kilfoyle: While we are in the business of giving credit where it is due, as the hon. Gentleman knows, Merseyside was the first English region to secure objective 1 status. Credit ought to be given to the then European Commissioner, Bruce Millan, and his chef de cabinet, Graham Meadows, who is still a member of a Brussels directorate, as they drove through the original idea of objective 1 for the English regions.

Andrew George: I entirely agree, and had dealings with both men, especially Graham Meadows, as I was involved with the 5b programme in Cornwall before we achieved objective 1 status. We should not forget the members of the European Commission who made a significant contribution to the process. Whoever claims credit for objective 1 status, we are entitled to ask questions. The poverty of Cornish people was the primary driver for objective 1 status, and it was for them that it was won. We should be concerned primarily with serving them, and I want to ensure that that is the case after 2006, as that is what the Cornish people richly deserve.

Dave Watts: I agree with the hon. Gentleman, but does he not agree that when objective 1 was created in Merseysidethe first area to enjoy that statusthe major problem was that the then Government would not provide the match resources, so what we had was substitution? Half the resources being spent in the programmes in Cornwall and everywhere else are being doubled up by the UK Government's regional policy. That is to the credit of this Administration.

Andrew George: I agree that objective 1 does not exist unless there is public match funding. If a Government, having signed up to objective 1 programmes in certain regions, did not match the funding, that would be a failure. The fact that this Government have largely honoured the promise that they made to match the funds is very much appreciated. I am sure that it is appreciated in Liberal Democrat Merseyside just as it is in other regions.
	The objective 1 programme in Cornwall has been a significant success. When we compare Cornwall withdare I say it in the presence of those representing these regionsother objective 1 regions, we see that it has met its targets for commitment and spend. Significant projects have been funded in Cornwall as a result of objective 1. For example, there has been the rolling out of broadband, and the Combined Universities in Cornwall has its hub and rim around the county. Objective 1 has also made a contribution to the Eden project.
	There have been many other significant contributions to projects around Cornwall, but the full effect of objective 1 and the investments made through the programme are not yet being fully felt. Clearly the gross domestic product of Cornwall has not yet reached anywhere close to the 75 per cent. level of the EU 25 average, so there is still more work to be done.
	On overall funding, and as a slight interlude, I should point out that problems still exist with the programme, and the partnership in Cornwall has been working heroically to overcome them. They are partly the result of the complexity of the system, but also of the way in which it dovetails into the many other area-based initiatives that the Government are offering. We are grateful for them.
	For example, in Cornwall and the Isles of Scilly, among the many initiatives, we have objective 1 integrated area plans, the much-appreciated neighbourhood renewal programmes and health action zones, the healthy towns initiatives, healthy living initiatives, market town initiatives, coastal town initiatives, vital villages, Sure Start, the Cornwall action team for jobs[Hon. Members: Labour.] We also have neighbourhood nursery schemes, the parish paths partnership, partnership development funds, the skills development fund, the rural key fund, rural renaissance initiatives, the community champions fund, community chest, the community empowerment fund and the safer communities initiatives. [Hon. Members: Labour.] I have named just a few, and if Labour is claming credit for all of them, it should provide a strategy in which to deliver them.
	Unfortunately, we have initiative fatigue in many areas, because so many bodies, visions, missions and committees have to be set up with the same people sitting on the same committees to manage little pots of money. I am not saying that we are not grateful, but it would be far better simply to devolve the pots of money and allow local communities to determine how best to revive themselves.

Peter Kilfoyle: I am not going to claim credit for Labour, because its record speaks for itself in Cornwall and in other areas. The hon. Gentleman mentioned the Eden project, so could he enlighten us on what proportion of the costs of that major and, as I understand it, very successful project was met out of objective 1 funding? Could he give us an indication of the other public funding streams that were used to supplement it?

Andrew George: I am grateful for that question. Actually, the project is not in my constituency but in that of my hon. Friend the Member for Truro and St. Austell (Matthew Taylor), who was in the Chamber a moment ago but had to leave to chair a meeting. The total project costs of the Eden enhancements were 38.5 million, and I understand that the public sector contribution was in the region of 15.5 million. However, those figures relate to the second phase of the Eden project development.
	The Government's regional co-ordination unit in the Cabinet Office has identified that more than 100 partnerships are operating in places such as Cornwall under area-based initiatives such as those that I described. I estimate that if we take into account all the money available through objective 1 and the various initiatives fundsall of them, whether through economic, social or infrastructure development are designed to address social exclusionwe are looking at a budget of 650 million over the next five years, which is made up of EU money, largely, and also match funding. Such funding is the equivalent of giving each of the 500,000 inhabitants of Cornwall 1,300, or of giving more than 100,000, or 20,000 a year, to each of the most deprived 5 per cent. of Cornwall's families.
	Problems arise when projects, especially smaller ones, try to interface with the objective 1 programme. The difficulties are due not to the programme officers but to the obstacles involved in accessing the programme and the tests that must be met. The gathering of match money so that a project can get off the ground is especially difficult. If the figures that I cited are the amounts available to people who are socially excluded in Cornwall, we could ask them whether they would prefer to receive funding in the form of vouchers to the value that I described, or a labyrinthine system that is difficult to access. The programme teams are working heroically to overcome the bureaucratic challenges that the Government and Europe have set them, but it is a fact that a lot of the aid is being spent on bureaucracy, consultants and facilitation, although I accept that facilitation is necessary to overcome the hurdles that have been set up.

Candy Atherton: The hon. Gentleman makes important points about bureaucracy, which none of us want, so does he welcome the fact that the UK Treasury is meeting key partners from Cornwall to find ways to ensure that match funding and core objective 1 moneywhatever it is called and however it arrivesget to the parts of Cornwall that we want them to reach?

Andrew George: Absolutely. I have been taking up my worries about area-based initiatives and the complexities that have been created for some time, which is why I was keen for the Cabinet Office regional co-ordination unit to acknowledge that there were problems with the bureaucracy surrounding the system. I suppose that the situation is in a way caused by the successful creation of many development programmes and area-based initiatives, but the complexities and problems that I have tried to describe have come with that. If the Treasury and the Government intend to introduce an initiative to try to iron out the problems of bureaucracy and delivery and to devolve responsibility so that people on the ground can make decisions, I will say, Alleluia, and strongly support it.

Lembit �pik: Government Members are keen to trumpet the success of Labour, but I feel moved to remind my hon. Friend and the House of the enormous problems that the Labour Administration in Wales had not so long ago, when they seemed unable to deliver proper commitments from Westminster Labour Ministers to secure funding. Does he agree that one of the biggest problems that we have in Wales is the fact that to this day there has been no statement from the Government giving us an assurance of the same kind of long-term funding security as is necessarily present in the arrangements that come directly from Europe?

Andrew George: I entirely agree. There have been acknowledgements, and in the consultation document circulated by the Treasury following the pre-Budget report in December there is a proposal to examine the delivery mechanisms, but even in that document there is no commitment to address issues of delivery of Government funds beyond 2008.

Peter Kilfoyle: On delivery mechanisms, perhaps the hon. Gentleman and I should have a conversation outside this place about the failure of the Liberal Democrat council in Liverpool to deliver anything meaningful under objective 1. The money has been made available by national Government and by the European Commission, but there has been a catalogue of total and abysmal failure by the Liberal Democrats on Merseyside to deliver a single flagship project.

Andrew George: I shall be happy to have a discussion with the hon. Gentleman outside this place, if he wishesa discussion, I say. He needs to reflect on the fact that the Liberal Democrats cannot be doing too badly, as they keep getting re-elected in larger and larger numbers.

Chris Ruane: The hon. Gentleman just concurred with the Member for Montgomeryshire (Lembit pik) on what he called the failure of the Westminster Government to give match funding to Wales. May I point out what actually happened? The Opposition in Wales were deliberately trying to stir the political pot ahead of the comprehensive spending review to get the Chancellor to reserve funding for Wales, which he was not prepared to do. After the CSR, hundreds of millions of pounds of match funding were made available to Wales. We delivered on objective 1 and we delivered the match funding in Wales.

Andrew George: Labour also delivered a change in the First Minister in Wales. I am happy to let hon. Members settle their political scores in their regions if that is what they wish to do, but I think scores are better settled, as I will do with the hon. Member for Liverpool, Walton (Mr. Kilfoyle), outside the Chamber. The hon. Member for Vale of Clwyd (Chris Ruane) should see my hon. Friend the Member for Montgomeryshire outside the Chamber to settle scores.

Lembit �pik: I accept the challenge to settle the matter outside, perhaps in the Strangers Bar. However, I remind the House that a large number of Labour Assembly Members called for the resignation of the right hon. Member for Cardiff, South and Penarth (Alun Michael) when he was First Minister on exactly the basis under discussion. It was not the other parties alone. It was Labour Assembly Members who said that because he had failed to secure assurances from Westminster, he should goso the blame cannot be pinned solely on the Opposition.

Andrew George: My hon. Friend supports my point. I hope Labour Members will reflect on that.
	Let us consider the successes in Cornwall and the Isles of Scilly. If the Minister accepts that all the partners in Cornwall and most of the politicians in Cornwall wish to retain objective 1 status beyond 2006, she can be reassured that in return for the guarantees that we seek from the Government, there will be a guarantee from Cornwall that we can deliver on our programme, just as we are doing now, but it is important that she should understand that we need to target economic regeneration resources at Cornwall and the Isles of Scilly. We need to own our own numbers, as it were. We need to have territorial visibility. We need to have structures that, as now, actually work. It will not help Cornwall and the Isles of Scilly to have a programme that is operated from an office in Bristol, Taunton or anywhere else, because that will not help its delivery in the place that most needs it. There is an important distinction to be made between a genuine region such as Cornwall and a Government zone such as the south-west. The delivery programmes that might be operated in each are necessarily very different.
	There is also support for the role of the partnership, and one of the points made by those operating the programme in Cornwall is that we now have something that has not happened successfully enough in the pastpublic, private and voluntary sectors working together, not only in the preparation of the programme but in its delivery. The private sector now articulates very directly to the public sector what it requires on training, for example, and in other spheres as well. An integrated programme is operating in an area where it is deliverable, and it would be unfortunate if the Government threw out the opportunity to maintain that and allow Cornwall to continue the economic regeneration and success that it has achieved in recent years and carry it forward beyond 2006.

Dave Watts: I understand the hon. Gentleman's concern, but does he not acknowledge that he has held meetings with Ministers who have made it clear that although the decision has not been taken on whether to have a nationalised or a European programme, there will be a programme for Cornwall in the future? On the same management point, does he further acknowledge that on a number of occasions the Minister has made it clear that she would like to discuss these issues in more depth to ensure that there is as much flexibility as possible, but there must be local, national and European accountability, so there will have to be structures there. I should have thought, though, that the hon. Gentleman could take some comfort from the fact that, since 1997, the Government have delivered on all those programmes and put a tremendous amount of new resources into helping areas such as Cornwall and Merseyside.

Andrew George: The hon. Gentleman must also recognise that, just as we had the discussion earlier about claiming creditI can assure him that the South West regional assembly which is not an elected or accountable body, still claims credit for having achieved objective 1 status for Cornwallin exactly the same way, Cornwall has had to fight all the way to achieve what it has achieved so far, and to achieve what it has achieved within the programme. The commitments made, which he will have heard me enunciate earlier, if he was in the Chamber, when I quoted letters and statements made by Ministers, are not sufficiently specific, on time scale, geographical coverage or the programme levels. There are clearly encouraging statements, but they do not amount to the kind of cast iron guarantees that exist in the third cohesion report. One can either see in that report a clear commitment for a seven-year period, plus two, and know that, depending on the negotiations, there will be a budget, or there will simply be promises of an intention to deliver, which we do not know will be achieved.

Peter Kilfoyle: Just to reinforce the point made by my hon. Friend the Member for St. Helens, North (Mr. Watts), I have come out of meetings with the Paymaster General with the clear understanding that there was an undertaking that whether the funding was repatriated or not, there would be no loss to the objective 1 areas. That is the only thing that matters. We want to see a smooth transition into the future: a proper taper that ensures that we can carry on with the development work in Cornwall, Wales and South Yorkshire, as well as on Merseyside. I was under no doubt whatever. I was completely satisfied coming out of those meetings.

Andrew George: Perhaps the hon. Gentleman is more easily satisfied than me. He says that the money will be there, but we are told that it will be there in the regions generally, not in objective 1 regions. It will be available in an area that is 10 times the size, and it will be siphoned off into other activities. If he has had an agreement for the delivery programme on Merseyside, good for him, but we have certainly not had such an agreement for Cornwall and the Isles of Scilly. That is what we are looking for: a clear contract, a budget, clear geographical coverage of a genuine region, not a Government zone, and a commitment for seven years plus two. We do not have that.

Peter Kilfoyle: Surely, the hon. Gentleman understands that government is an organic process and that, as things improve, we expect it to adapt to changing circumstances. The figures and statistics for Cornwall have long been depressed, as have those for Merseyside and other areas, but one hopes that the success of the programme will be measured by those areas' ability to come out of it. I do not want Merseyside to qualify for objective 1 criteria for ever and a day. I want it to move over the 75 per cent. threshold, so that we can stand alone and fight our own battles in the wider world. Surely to God, he cannot look for some kind of guaranteed commitment to provide a specific kind of funding for ever and a day. The arrangement is bound to change according to circumstances.

Andrew George: I am asking for a commitment not for ever and a day but for seven years. In the light of Cornwall's 65.3 per cent. GDP figure, it is highly unlikely even with the best possible prospects that it will jump over the thresholdas I hope Merseyside will, as well as Cornwall. We must be realistic: Cornwall will not burst its way through the 75 per cent. threshold tomorrow, and it is not likely to do so before 2006. We know that it is bound to be eligible for objective 1 status beyond 2006. The point that I am making is that we want a commitment for seven years plus two, not for ever and a day. Hon. Members do not appear to be able to hear what I am saying.

Dave Watts: While many of us can claim credit for campaigning for objective 1 funding over many years, the decisions are made by the Council of Ministers. It will be British MinistersLabour Ministerswho will negotiate on our behalf in the Council of Ministers. Obviously, the sort of guarantees that the hon. Gentleman is seeking cannot be given until those discussions have taken place and there is general agreement about whether there will be a nationalised policy or a European programme, and about the size of the initiative, the amount of resources, and how long it will last. He should take some comfort from the Government's regular statements that Cornwall's status will be maintained either Europewide or in the UK and that resources will come into Cornwall to compensate it if it has a UK-based scheme rather than a European one.

Andrew George: I cannot say that I take comfort from what the hon. Gentleman says. It is encouraging, but I am not reassured. We are playing with words, and we are in a grey area with regard to how satisfied we are with the settlement.
	Even if the Government wish to promote the argument of achieving a 1 per cent. level for the EU budget, I do not understand the logic that says that the UK is therefore arguing that only accession states that are eligible for objective 1 funds should be in receipt of them. If we are entitled to objective 1 funds, as Cornwall will bethey could be, say, 300 million over seven yearswhy not have that money, which will help to supplement the UK's own contributions to its own regional economic development? I cannot see the logic of completely cutting ourselves off from access to European regional structural funds, and I hope that the Minister will take that point on board.
	I have spoken for a reasonable length of time, but a certain amount of time remains. The Government have made some encouraging statements, but future statements must include nailed-down commitments on areas that are currently eligible for objective 1 status.
	I hope that the Minister understands that the matter is one of genuine concern and not simply the result of politicians' campaigning. Apolitical and non-political people in Cornwall and the Isles of Scilly are genuinely concerned: they have engaged with the programme by examining the third cohesion report and statements made by Ministers, and they say, We want to keep objective 1 status, thank you very much. I hope that the Minister will take that point on board and consider whether she can strengthen some of the Government's commitments, and in particular those on geographical coverage, length of commitment and available budget.
	It is vital that we have a programme that includes a contract with those areas. Cornwall and the Isles of Scilly is a region that genuinely works and that people recognise, unlike the Government's south-west zone, which was clearly created for bureaucratic convenience and is not the basis on which to deliver the kind of aid that we have discussed.

Llew Smith: Before I became a Member of Parliament, I spent 10 years as a Member of the European Parliament. Throughout those 10 years, I and other Labour MEPs campaigned for objective 1 or a scheme that could deliver similar investment not only in Wales, but throughout the United Kingdom. Like those Labour MEPs, I would like to claim credit for delivering objective 1, but in my more modest moments, I admit that its successful introduction was because of the election of the Labour Government, without which objective 1 money would not have come into communities in my area, south Wales.
	I remember when nationalists in Wales argued that it would be impossible to introduce objective 1 into Wales because of the absence of a Welsh Parliament and the lack of independence for Wales. The Labour Government showed that independence and a Welsh Parliament were irrelevant and that, given energy and ideas, it was possible to deliver objective 1. They delivered objective 1, from which communities such as mine have benefited for a number of years.
	Objective 1 can play a major role in helping to revive communities. In Blaenau Gwent, for example, we have some of the highest levels of unemployment in Wales, some of the lowest wages in the United Kingdom and some of the worst health problems, which involve heart disease, respiratory disease and lung cancer. We are near the top of the list for problems relating to mental health, we have low levels of car ownership and our housing stock is very poor. Those problems have not gone away as a result of objective 1, but objective 1 can play a major role in particular communities.
	We should not try to convince ourselves that the problems have gone away. In Blaenau Gwent, for example, we still have a major unemployment problem, which involves not only the number of people who are unemployed but the kind of jobs that we have lost in our communities. We have lost a big part of our manufacturing base. In the 1980s, we lost the coal industry, which was a major supplier of jobs in our particular community. More recently, we have lost the steel industry and other major manufacturing companies such as Bosal and Faurecia. Just before Christmas, Yuasa Battery announced that it was to make between 200 and 300 people redundant and the work was to go to another country.
	Just last week, I met the work force of Merton Packaging, which has been functioning in my community for the past 20 years. The work force are very skilled, highly motivated and loyalso loyal that they have not had a wage increase for four or five years. On returning to work after the Christmas holidays, they found that the doors were locked and were told that the company was going into liquidation. That is the kind of behaviour that one would expect of a 19th-century employer, but this is a present-day employer, operating in my community.
	It is not only the number of jobs that is important, but the kind of jobs. We have attracted jobs to Blaenau Gwent, but far too many of them have been low-paid, part-time, non-union, soul-destroying jobs. It is interesting that we, like other parts of the country, are losing jobs to other countries, but our jobs are being lost from a community that has some of the lowest wage levels in the United Kingdom. If we cannot reclaim those jobs, there are obviously problems in other parts of the UK.
	On tackling low wages, the minimum wage has obviously been an important policy development for my community, but it is still much too low. It needs to be dramatically increased if people are to have the dignified lives that they deserve for their labours.
	In Wales, we have an additional problem in that much of the investment, which is the responsibility of the National Assembly for Wales, has been directed not to some of the poorest and most deprived areas but to some of the richest communities in Wales. There is a shortage of money in many areas, including Blaenau Gwent, but investment is going to places such as Cardiff bay. We saw an example of that just before Christmas, with the opening of the Wales Millennium Centre, a glorified opera house, which cost over 100 million and has been guaranteed by Rhodri Morgan a permanent subsidy of 2 million a year. Just imagine what some of the deprived communities in Wales could do if they received the kind of money going to the richest areas. We need to continue and increase the investment going to those deprived communities. With the amount of money going to Cardiff bay, Blaenau Gwent could revolutionise life in our community. Objective 1, with all its limitations, must continue in one form or another.
	If we are to attract jobs to Blaenau Gwent, we are told that we must concentrate on high-skilled jobs. I agree to a certain extent, but we have problems because the amount of investment in further education in Gwent is decided by the quango Coleg Gwent. Midway through last year, it decided to close the engineering and catering departments in my constituency, which is probably the most deprived area in Wales. The new principal of Coleg Gwent and the deputy director of ELWa said, Not to worryyour constituents can still study engineering but they can do it in Nash, which is in the outer part of Newport. I do not have a PhD in geography, but I understand the difficulty of travelling from my constituency to Nash in Newport. Indeed, if a student from Blaenau Gwent wished to study engineering in Nash, it would take a round trip of five hours. If he or she decided to spend five hours on public transport, they still would not arrive in Nash in time for the commencement of the course each day. How can communities such as ours concentrate on trying to attract high-skilled jobs when the people responsible for further education are closing the very departments that can deliver the training and education necessary for those jobs?
	Other people in authority have said, We've got to concentrate on attracting tourism to Blaenau Gwent, because it is a beautiful part of the world. No one doubts that. Yet the people who control Gwent's further education decided to close the catering department. How can we boost tourism in Blaenau Gwent by closing the catering department, which plays an integral part in the training required for a buoyant tourist industry?
	The problem with objective 1 is not a shortage of money, but priorities. In the years when I was in the European Parliament, the priority was to concentrate on directing moneys towards the agricultural sector through the common agricultural policy. Every year, at budget time, the Commissioner would make a statement in which he told us, Things are not well with the common agricultural policy, but not to worrytomorrow all these things will be changed, the problems will be rectified and the amounts directed to agriculture will decrease. In other words, areas such as mine would benefit. That has not happened over the past decade or so, and I suggest that it will not happen in any big way in the months and years to come.
	If the European Union and the European Parliament are to be seen as relevant by the people outside, they must be seen to be responding to the problems that people have in communities such as mine. Until now, leaving aside noble exceptions such as the objective 1 programme, they have failed in a big way to do that. We must not forget that we are still paying more into the European Union than we are receiving back, even allowing for the rebate. That injustice should be rectified.
	My final point concerns who takes the decisions. The hon. Member for St. Ives (Andrew George) spoke about the role of quangos, which has been a contentious subject in Wales. We were told that, if we elected a Welsh Assembly, it would bring about a bonfire of the quangos, but that has not happenedit has been very much a damp squib. Too many decisions in Wales are taken by people who are not elected, not accountable and cannot be removed. That is surely wrong. We want decisions to be taken by people who are elected, are accountable and can be removed if people see that they are not responding to their problems.
	We were promised not only a bonfire of the quangos, but that many of their powers would be transferred to democratically elected bodies such as local authorities. That has not happened in Wales. People in Wales know now, if they did not at the time of the referendum for the National Assembly, that they were conned in a big way. Many people went along with it, even though some of us argued and predicted the result.
	There are big problems, not only in my community but in communities throughout the United Kingdom that still suffer from unemployment, the loss of good jobs, low wages and all the deprivation that goes with that. We need some sort of scheme to continue after 2006 if our problems are to be rectified.
	I want to end as I began. I would like to claim credit for objective 1 funding, and I am sure that other former MEPs would too, but we would admit in our humbler moments that it is due to the election of a Labour Government. I say that as someone who has been somewhat critical of the Government on one, two or perhaps three occasions.

Lembit �pik: I agree with the comments of my hon. Friend the Member for St. Ives (Andrew George). Many of them apply to Wales. I was also interested in the suggestion of the hon. Member for Blaenau Gwent (Llew Smith) that he personally, not the Labour party, was responsible for European funding.

Llew Smith: rose

Chris Ruane: My hon. Friend did not say that.

Lembit �pik: I know. I shall give way but I understand that the hon. Gentleman did not really say that.

Llew Smith: Either the hon. Gentleman suffers from major problems with his hearing or I have a major communications problem. On this occasion, I shall be polite and say that the hon. Gentleman has a problem with his hearing. On two or three occasions, I said that I should like to claim credit for the introduction of objective 1 but that I knew that the achievement was due to the election of a Labour Government. I repeat, a Labour Government.

Lembit �pik: I shall simply say that there has been a sense of humour breakdown rather than a communications breakdown. To avoid doubt and so that the hon. Gentleman does not get into trouble with the Prime Minister, I stress that I fully understand that he is not, at least on this occasion, taking on his party leadership. Nevertheless, he spoke about the benefits of objective 1 to his constituency.
	There is no question but that objective 1 has been enormously helpful to Wales, although unfortunately not to Montgomeryshire, which just missed out. By any measure today, it would qualify for objective 1, but it just missed out at the time. That was a disappointment to my constituents. We got limited funding but not on the basis of objective 1. One of my minor criticisms of the objective 1 system is that the inflexibility of its criteria mean that many regions in the United Kingdom, including mid-Wales, have missed out.
	The third report on economics and social cohesion, which the European Commission published on 24 February 2004, charts the way for structural funding in Wales for 2007 to 2013. I am tempted to discuss the success of objective 1, but that has been covered widely in interventions. The debate, which is about the way in which the needs of Wales and the United Kingdom should be met through structural funds in future, is most important.
	The cohesion report states that the UK is the most divided state in Europe, even including the 10 accession states, for apportioning funding. The figures in the cohesion report clearly show the poverty of aspiration of successive UK Governments in regional development policy. European structural programmes offer an opportunity for regions such as Wales, but also parts of England, Scotland and Northern Ireland, to escape from the straitjacket of rules and funding that UK Governments impose. I stress that such restrictions and the lack of joined-up thinking in dealing with the enormous disparity of wealth in the UK make several of us suspicious of future funding strategies if they are to be primarily in the hands of the UK Government.
	The Welsh Liberal Democrats favour a continued link with European funding for economic development projects in Wales. What is likely to be on offer from the UK Treasury would probably be limited to three years, whereas European funding would be solid for up to eight years. Indeed, during the debate in the Assembly on Wales in Europe on 18 June 2003, my colleague Mike German, AM, highlighted the dilemma. He asked a question about the repatriation and future of structural funds in Wales, and inquired
	whether the European Union, as well as the United Kingdom, has a clear role to play in addressing the problem of lagging regions. The regional policy ministerial meeting held recently in Chalkidiki and the subsequent statement in Plenary confirmed that we are heading for an unprecedented widening of regional disparities across Europe.
	That is why I would be concerned if the United Kingdom Government were to decide that they should hold the primary reins of distribution for such funding across the United Kingdom.

Dave Watts: As I understand it, the only way in which the Community could continue its objective 1 and 2 programme would be through a massive increase in funds. The UK Government would therefore have to make a contribution to the European Community for that programme to continue. How can the hon. Gentleman be sure that the resources that would come from the UK would be spent in objective 1 and 2 areas here?

Lembit �pik: There are two elements to the hon. Gentleman's question. First, he is right to say that there is no question but that the funds have to be available. We need to have a transparent debate on the relative cost to the wealthier nations such as the United Kingdom of ensuring that the funding is there. He did not saybut I willthat other parts of Europe, including the 10 accession countries, will also be making similar claims. I know for a fact that Estonia is likely to do so, so there is a funding issue involved. The action to take in that regard is for us to have a longer debate on the financial implications of UK expenditure in that system and on what the likely return would be.
	The second part of the hon. Gentleman's question can be answered as follows. The Liberal Democrats' strategic interest in speaking in favour of maintaining something like the existing system stems from our faith in the fact that the funding is long-term. It could last until 2013 or even 2014. Our concern about the alternative system is that there could be no guarantee of funding over such a long period, during which there will necessarily be a number of general elections. Government policies might change and the promises made by the Chancellor of today might not be honoured by the Chancellor of tomorrow. That is the difficulty. We therefore have a strategic concern about the solidity of that long-term funding arrangement, which could change depending on who was in office in the Exchequer and who was in government.

Dave Watts: Does the hon. Gentleman agree that the long-term regeneration of areas such as mid-Wales, Yorkshire and Cornwall depends on the Government themselves making resources available? At the end of the day, whether an area has an objective 1 or objective 2 programme, the amount of resources that will be made available depends on the whim of the UK Government of the day. Does it not give him confidence that, since 1997, this Government have shown that they have vastly increased those resources? Is not the best way to ensure that those resources are available to objective 1 and 2 areas to tell people to keep on voting Labour?

Lembit �pik: If the hon. Gentleman looks at the history of this issue in Wales, he will see that one of the great frictions in Welsh politics was caused by the fact that the then First Minister, the right hon. Member for Cardiff, South and Penarth (Alun Michael), could not deliver what a number of Labour Welsh Assembly Members themselves demanded. In other words, the friction did not come from the Opposition parties alone. It came from within the Labour party, which, on the basis of this very issue, demanded the resignation of the right hon. Member for Cardiff, South and Penarth from his role as First Minister and replaced him with Rhodri Morgan. I understand the political point that that the hon. Gentleman makes, but the equally political response is that it was not good enough for Labour in Wales. It would have been instructive for him to have seen the frictions that this very issue caused in that nation.

Chris Ruane: Would a Liberal Democrat Chancellor of the Exchequer, should there ever be one, guarantee sums of 400 million for one region, and 600 million for another, in the middle of a comprehensive spending review? Would that be right?

Lembit �pik: Of course not, and that is the point that we are discussing. My hon. Friend the Member for St. Ives suggested that the hon. Gentleman and I should settle this score outside the Chamber. I have just been reading a book about the great fight between George Foreman and Muhammad Ali, and I fear that it would be less The Rumble in the Jungle than Danger down in Strangers. I am sure that we can accept one common issue: the frictions that seem to arise in this debate about the certainty of long-term funding are shared, regardless of the colour of the Government. Long-term certainty is therefore what those in business engaged in long-term investment crave, as they can then make long-term plans. That is very important for industry.

Peter Kilfoyle: The hon. Gentleman mentioned how Montgomeryshire had missed out on objective 1, so I understand his disappointment in relation to his emphasis on the normal give and take of argument about the processes and mechanics of how objective 1 ought to be applied. Will he give credit to the Minister for Sport and Tourism, the then Minister for the Regions, Regeneration and Planning, who went to great lengths to ensure, with a lot of support from different elements in his party and from others in the House, that the most needy parts of Wales, as well as Cornwall and South Yorkshire, shared in the benefits of objective 1, which he had seen for himself on Merseyside?

Lembit �pik: I would. My point is not primarily partisan, although others may have sought to make this a partisan debate. Where others speak the language of war, I sow the seeds of peace and hope that we harvest collectively the benefits of European funding. In that context, I recognise that this Government have done far more than a Conservative Government would have done in achieving the benefits of European funding.
	What we are discussing is the way in which funding mechanisms would be best structured. It is a simple debate for me. I and the Liberal Democrats believe, as my hon. Friend the Member for St. Ives explained, that the long-term stability of funding is best secured by an objective 1 system that rests primarily on the shoulders of the European Union. To respond to one part of the earlier comments, that would create political pressure, as we have seen in Wales, for the United Kingdom Government, or the Welsh Assembly Government, to respond in kind. Clearly, others in the House think that we should leave it more in the hands of the UK Government. We are saying that that is a relatively unreliable way to maintain long-term funding. Each of us must draw our own conclusions, but that is one reason why this is an interesting debate.
	While, as the hon. Member for Liverpool, Walton (Mr. Kilfoyle) highlighted, many deprived areas of Wales have benefited, some parts of my constituency have not, even though, by the normal measures, they suffer substantial deprivation. I want a more flexible approach, with more localised support than under the current broad-brush regional assessment of poverty.

Wayne David: The hon. Gentleman is beginning to touch on an important point, albeit at the end of his contribution. Leaving to one side the issue of funding, does he agree that it would be better for the European principle of subsidiarity to apply, for Brussels to have less say about how funds are spent in Wales and to have more localised and regional determination about how money is spent, addressing real needs?

Lembit �pik: The hon. Gentleman is right that subsidiarity and flexibility are important. I believe that they can best be achieved through a more guidelines-based approach to how funds are spent and clarity about the outcomes required from the expenditure. A Europewide debate about that in the months ahead would be constructive. The hon. Gentleman's constituents, and mine, would benefit from the localisation of some investment, rather than money being invested in wealthy areas that do not need it so badly.
	I am pleased that the Government have shown more commitment to this funding programme than I think would have been shown by a Conservative Government, although I am sad that they have not shown as much commitment as the Liberal Democrats will after the next general election, when we form the Government. Let me end on a positive note. The foundations laid by Labour will certainly be built on by the Liberal Democrat Government in a few years, and I thank the Government for the work they have done, but I make them a promise: they ain't seen nothing yet.

Candy Atherton: I welcome the opportunity to speak. As many Members on both sides of the House know, I have taken a particular interest in objective 1. I was delighted when the debate before this finished early, because it meant that this debate could continue for longer. It is a critical debatealthough whenever we have such debates I experience a sense of dj vu. The doom and gloom mongers always emerge and say, It is never going to happen; we will never get what we need.
	I well remember when Cornwall first set out to achieve objective 1 status. I entirely accept that many people were involved in the campaignthe Liberal Democrats, the Labour MP, the Liberal Democrat MEP of the day, the county council and the community. We all stood together and we all argued the case, but the fact that we were statistically linked with our colleagues and friends in Devon constituted a barrier preventing us from obtaining stand-alone regional status in the European Union and receiving the money. The critical moment occurred when the Prime Minister instructed senior civil servants and fellow Ministers to make the case for decoupling us from Devon.
	I remember the Liberal Democrats saying, It will not happen. There was much beating of breasts. They said, We must go to Berlin to make sure that this Labour Prime Minister does not forget Cornwall. It will be forgotten among the great mass of other issues. But the Prime Minister delivered for Cornwall. Then what did the Liberal Democrats say? They said, We will never have the match funding.
	The hon. Member for St. Ives (Andrew George) smiles, because he knows that that is absolutely true. Every time we have done anything involving objective 1, the Liberal Democrats in Cornwall have said, It will not happen. Four years ago, almost to the day, the hon. Member for Truro and St. Austell (Matthew Taylor)who is not presentaccompanied me to the launch of Combined Universities in Cornwall, which was also attended by the regional development agency, the higher education partners and all the people who had worked so hard on the project. Having been briefed on it, he told the media that the British Government would not come up with the match funding. And what has happened? The buildings have been built, the staff are in post, the students are there, and we have a fantastic icon for Cornwall.
	I applaud what the hon. Member for St. Ives says about ensuring that we secure the best possible deal for Cornwall. I will stand up for that and fight for it. We must look at the history, however, and the history is that this Government and only this Government have really invested in Cornwall. Ten years ago, unemployment was soaring. A journalist to whom I was talking the other day said, We could not wait for the unemployment figures 10 years ago, Candy. We used to snatch them off the fax machine. It was always a great story for us because the figures were so awful. We do not even report them now.
	The challenge for phase 2 of objective 1or son or daughter of objective 1is to ensure that we raise wages in the county and do not have to fight for more money in the future because the economy is vibrant and dynamic and we are standing alone. The hon. Gentleman mentioned that earlier.

Andrew George: Will the hon. Lady give way?

Candy Atherton: I am in some flow, but I will.

Andrew George: I wanted the hon. Lady to hesitate at least for a while, although I appreciate that she was, in fact, in full flow. I think that she has rather overstepped the mark. Not only have many who were involved in the achievement of objective 1 status been airbrushed out of history, but there has been a certain amount of rewriting. She claims, among other things, that it was all doom and gloom and we said that we would never receive match funding. She must understand the distinction between saying that that would never happen and saying, as my hon. Friends and I did, that we needed to campaign for the match funds and the projects. We realised that we had to campaign hard to achieve those things.

Candy Atherton: I realise that there is a difference between a press release in Cornwall and what is said in the Chamber. However, as history showsand as even this week's press releases showsuch comments constituted a lot more than simply the raising of issues; they were a lot more certain in tone than that.

Chris Ruane: What is my hon. Friend's assessment of the effect of such doom-mongering on morale and enthusiasm in the business, voluntary and public sectors? [Interruption.]

Candy Atherton: Opposition Members laugh, but that is not what the people of Cornwall do when such comments have their impact. Anything that causes uncertainty and hesitancy, and places a question mark over future investment, has a real impact on the business community. Many people in the business and public sectors have come to me and said that such comments have a bad effect. I am not saying that only the Liberal Democrats are to blame. There is a regional

Linda Gilroy: Does my hon. Friend think that it does us any good when these negative press releases appear in the Western Morning News, which then lands on the desks of potential inward investors?

Candy Atherton: Speaking as a journalist, I take my hat off to any campaigning newspaper. However, I know that one or two potential investors in the wider west countrynot necessarily in Cornwallhesitated and decided not to invest as a result of such press releases. They thought that some parts of the media in the south-west were not to their taste. That is very regrettable and I hope that they will think again.
	I return to the central issue and challenge, which is where we go with objective 1. The Commission has come up with its plans, but they are neither agreed nor funded. Having another tranche of objective 1 for seven years, plus objective 2, sounds very nice in theory, and it might seem as if everything will be rosy at the end of that process. However, we do not have that certainty. The Commission has put its plans on the table, but it does not have the money. It is the Council of Ministers, representing 25 countries, that must come up with a deal, so unanimity is going to be very difficult to achieve.
	As a Labour Member of Parliament for a Cornwall constituency, I felt it my job to make sure that Ministers know that ours is the only area that stands to get objective 1. I am very pleased that the Chancellor pledged, during a meeting with me, to ensure that Cornwall will not lose out and, critically, that it will do better than under the EU proposals. That is a very fine pledge, which I have never heard from the Conservatives or, I fear, from the Liberal Democrats. When I last debated this issue in the House and I challenged the Liberal Democrat spokesman, he refused to commit to funding objective 1, as the Labour Government have pledged to do.

Wayne David: On the critical issue of funding, does my hon. Friend agree that although it is very easy for the European Commission to make all sorts of wild promises about how much money it would like to give out, in reality it has no money to allocate? Everything depends on the Council of Ministers, so any commitments given by the Commission are purely hypothetical.

Candy Atherton: That is the point, which is why I approached the Chancellor and various Ministers, including my right hon. Friend the Minister for Industry and the Regions, and told them that Cornwall is the only region in the UK that stands to get the full tranche of objective 1. Although many of my colleagues representing other regions will rightly argue their casesome of them are here this eveningI am very concerned that the special nature of Cornwall be recognised, and I am delighted that this Labour Government have made that pledge.

Dave Watts: Does my hon. Friend, who has championed this issue on Cornwall's behalf for many years, agree that it is very easy to get carried away with objective 1 and 2 funds? Frankly, Cornwall's ability to regenerate will be determined not by whether it has an objective 1 fund, but by whether the Government of the day provide the resources that this Government have provided since 1997. Such funding, although a helpful contribution, is a fraction of what is needed; it is not the main factor.

Candy Atherton: I entirely agree. There is probably more unanimity around the Chamber than is reflected in our debateswe all want the best for our constituencies. From my personal viewpoint, I am going for a win-win. I am going to debate with the Government, meet the Chancellor and other Ministers and argue the case. If we get more money via the UK Government, that is great, but I will want commitments on the time scales and match funding. I am pleased that Treasury Ministers and officials are meeting partners in Cornwall to make it work better. It is in everyone's interest to make the money work in the different parts of our regions that need it.

Andrew George: Will the hon. Lady give way?

Candy Atherton: No, this is important.
	On the question whether the money is to come from Europe, we need an answer soon. We need a commitment from the Government that they will continue to put money into a county that still needs their support. We have made huge strides and I am so proud of the way in which the county has risen to take up the challenge of objective 1 and made it work so wellfor example, with the university, broadband, the urban regeneration company in my constituency and so forth. Much is going on, but there is a lot more to do. I look forward to receiving the Government's support in the future.

Chris Ruane: I congratulate the hon. Member for St. Ives (Andrew George) on securing the debate. I know that he has been active in the all-party objective 1 group. We have made progress over the years on this issue and we are now at a critical point in securing the funding that objective 1 areas need.
	Members who have already spoken have given a flavour of their own areas, constituencies and regions, and I should like to give a flavour of my area. The counties of Denbighshire and Conwy were not included in the original objective 1 bid for Wales, which was for 13 of the 22 counties. The Cardiff business school came up with some statistics, however, to prove that Denbighshire and Conwy did indeed have a low gross domestic product. That information was passed to the head of economics and economic development in Denbighshire, Gareth Evans, who forwarded them to me as the principal MP for the county. I then passed the statistics on to the research department of the House of Commons. When they were rejigged according to EUROSTAT standards, Denbighshire and Conwy came out even worse. Conwy had the lowest GDP in the whole of Walesat 58 per cent., lower even than Cornwall. We were joint bottom with Bridgend, if I recall correctly.
	I and my colleaguesmy hon. Friends the Members for Clwyd, West (Gareth Thomas) and for Conwy (Mrs. Williams) and, indeed, the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd)were able to lobby the then junior Minister with responsibility for objective 1 in Wales, my right hon. Friend the Member for Neath (Mr. Hain), to consider the new statistics and allow Denbighshire and Conwy to become part of the objective 1 bid for Wales. To his credit, my right hon. Friend did that. Had he failed to do so, we would have been looking at a rejuvenated Flintshire and Wrexham to the east, an objective 1 area in the north-west of Wales and an objective 1 area in Merseyside. That would have left us hanging in the middle like a black hole for ever.
	I am therefore very pleased that that junior Minister, now the Secretary of State for Wales and my boss, took that decision in the teeth of opposition from some senior nationalist politicians, not to mention some Labour politicians down in the south. The opponents believed that looking into that case at such a late stage would upset the applecart, result in EUROSTAT crawling all over us and jeopardising the entire objective 1 bid for Wales.
	I hope that that gives the flavour of the history of objective 1 in my area. I like to feel, as do others, that I played a full part in securing objective 1 status for my region. I pay tribute to the House of Commons research department for supplying me with the statistics that proved critical in convincing the then junior Minister to accept Denbighshire and Conwy.
	It is worth comparing the Labour record with the previous Conservative Government's record. They took away assisted area status from my area of north Wales, despite the fact that we had lost about 21,000 jobs as a result of the closure of the Shotton steelworks only 10 years before assisted area status was taken away from poor areas in north-west Wales. It is to the Labour Government's credit that Denbighshire and Conwy, and West Wales and the Valleys have objective 1 status.
	We have made good use of the money that we have had over the past four years. We will have it for another two years, and it is important that we have a lengthy tailbackseven years, plus twoto make sure that we finish the job that we have started. The decline has gone on for 40 years in seaside towns such as Rhyl, Kinmel Bay, Colwyn Bay and Llandudno.

Dave Watts: And Talacre.

Chris Ruane: And Talacre as well. We cannot reverse 40 years of decline in six years, which means that we must secure the funds for seven to nine years, to make sure that we can finish the job.

Wayne David: Does my hon. Friend agree that the fact that central Government have given allocations to Wales over and above the Barnett formula has been crucial to the success of the objective 1 scheme in West Wales and the valleys? That has allowed match funding to take place.

Chris Ruane: I agree, and will deal with that point shortly.
	What type of jobs have been created? The traditional industries in my part of north Wales are coal, agriculture and the work that goes on in seaside towns. They have been in slow decline over the past 30 years and the structural funds will allow us to change the structure of the north Wales economy.
	That is happening in my constituency. An example is the St. Asaph business park, which was built by the previous Conservative Government at a cost of 11 million. The connecting flyover alone cost 2.5 million. The park was empty for seven years, with only 100 jobs in all. Since the Labour Government took office in 1997 and objective 1 status was granted, the number of jobs has risen to 2,500.
	Those high-quality jobs could not have been secured without objective 1 funding. For example, the OpTIC project cost 15 million, of which 6 million came from objective 1 funding. It is an incubation and research centre, with 24 individual units. It will co-operate with the 35 existing electro-optic equipment companies in north Wales, which employ 2,500 workers. If one of those workers has a good idea, further research can be performed at the centre to assess its value. Successful ideas will be given a unit and allowed to grow. These companies will have an 80 per cent. survival rate over a five year period. That is an example of how high-quality jobs will replace the jobs in farming, mining and seaside towns. Every two years, 24 new high-tech companies start up in my area of north Wales. They will provide the sustainable jobs that we need for the 21st century.
	The momentum created in the St. Asaph business park has attracted other firms. The Japanese firm TRB was the first ever foreign company to make inward investment in my constituency. The Austrian company Pachem has established an objective 1 factory in Rhyl's south-west ward. I was brought up in that ward, and it is in the top 5 per cent. of the poorest areas in Wales. That foreign investment will raise our profile around the world, because of objective 1.

Dave Watts: Does my hon. Friend agree that state aid is as important as European structural funds to the future economic development of his area and mine? Does he share my view that the Government must ensure, in the Council of Ministers negotiations, that we continue to have state aid in areas like ours?

Chris Ruane: Yes. We have raised the question of state aid in relation to Denbigh high street and I have asked Glenys Kinnock to look into the matter with a view to getting the state aid rules revised and clarified.
	There is more to this than putting up large sheds for Japanese, Austrian or even native companies. We must be able to provide the skills that those companies need. Objective 1 status in my area has helped Llandrillo college, which is situated some 20 miles away, to establish colleges in some of the poorest communities in Wales. For example, the west ward in Rhyl is the poorest of all the 865 wards in Wales. A college has been set up there for the first time in the town's history, only 100 yd away from that ward's boundary. The philosophy of the college is to reach into those poor communities and raise the skills of their people so that they can access the high quality jobs that are being created at the St. Asaph business park and in other places in north Wales.
	I give credit to the principal of Llandrillo college, Huw Evans, for having the foresight to establish Rhyl college, headed by Irene Norman, and Denbigh college, headed by Julia Hughes. They are doing fantastic work in those towns and are also establishing links with smaller communities such as Bodelwyddan and Meliden, through their philosophy of taking learning into the community. Building on such work we will be able to raise the skills level so that people can get higher-paid and better jobs in the future.
	The hon. Member for St. Ives tried to make the point that there was initiative overload by referring to between 20 and 30 Labour initiatives, but those initiatives are targeted and specific. They are not in competition with objective 1; they can co-operate with it. The Labour Government changed the rules on town heritage initiative grants. Under the previous Conservative Government, the fund for the Churchill diaries was awarded 12 million to prevent the diaries being sent to America, and 5 million was given for the playing fields of Eton. We said, No more of that. Under a Labour Government, THI money goes where there is poverty and where there is architecture.
	We changed the rules. The initiatives can be complementaryin towns such as Denbigh and Rhyl in objective 1 areas, THI money is coupled with objective 1 money to revitalise town centres that were neglected for so long under the Conservative Government. Those initiatives can result in additional funding for poorer communities.
	We need to put the matter in perspective. In Wales, objective 1 funding, with UK, EU and private money, amounts to 3.2 billion. The Welsh block grant was 6.5 billion in 1997, but it is now about 12.5 billion a year, so we need to keep things in proportion. We have been giving credit to ourselves and to others, but we should also give credit for the macro-economic management of this country since 1997.

Lembit �pik: Before we hear the eulogy to the Chancellor that will tell us the hon. Gentleman's side of the camp, I suggest that, given his reference to an additional payment above the Barnett formula, the Barnett formula needs to be revised. Would not it make sense to throw out a formula that even its inventor thinks outdated and replace it with something that better fits the needs of Wales and the funding requirements for objective 1?

Chris Ruane: I do not share the hon. Gentleman's view that we need to revise Barnett; it could be revised upwards as well as downwards and our English colleagues in London and the north-east may have their own perspective on that.

David Taylor: Wales has a population of 2.9 million, almost the same as that of the three east midlands English counties of Nottinghamshire, Derbyshire and Leicestershire, which have a similar socio-economic profile. Can my hon. Friend tell east midlands MPs, such as me, how we could share in the largesse that the Barnett formula gives Wales and, a fortiori, Scotland?

Wayne David: Become part of Wales.

Chris Ruane: Indeed. That is one avenue that might be explored.
	The macro-economic position has helped West Wales, the Valleys and my constituency, as well as the constituencies of many Members. Objective 1 would not deliver on jobs if we did not have the lowest interest rates for 30 years or our current employment levels. People are employedthey have money in their pockets and can buy the goods and services that we are creating in Wales. The macro-economic policies have been fantastic since 1997. They have not just dropped from the sky and are not, as the Opposition say, the golden legacy of the Conservative era. They are the result of deliberately targeted policies such as the new deals for lone parents and for young people, child care provision and Sure Start, which allows young mothers and families to get back to work in the knowledge that their children are being looked after properly. Also helpful was the decision, opposed by the ConservativesI do not know about the Liberal Democratsto give control of interest rates back to the Bank of England.

Andrew George: I am grateful to the hon. Gentleman for raising the issue of where the Liberal Democrats stood. In fact, giving control of interest rates to the Bank of England was Liberal Democrat policy before the 1997 election, although it was not Labour policy then. It was one of the first policies that they unceremoniously nicked.

Chris Ruane: I would disagree.
	Other colleagues wish to contribute, so I shall conclude. I sing the praises of West Wales and the Valleys and of Andrew Davies, the Minister for Economic Development and Transport in the Welsh Assembly, as he is an unsung hero who does not receive enough credit. I have given credit to the Chancellor and the Prime Minister for their initiatives, but I pay credit to Andrew Davies who has overseen objective 1 implementation in Wales and done a fantastic job. I pay tribute to the work of Chris Farrow, the head of the Welsh Development Agency in north Wales. We have the best record of economic development in Wales, and a great deal of that is down to Chris Farrow. All in all, Labour has done a good job.

George Howarth: I apologise to the hon. Member for St. Ives (Andrew George), as I was not in the Chamber when he opened this Adjournment debate. Unfortunately, I had responsibilities elsewhere in the House, but I did manage to catch most of his speech. I congratulate him on raising this subject, as it provides a timely opportunity for many of us to contribute.
	I shall make some general observations about objective 1 and its future, followed by some specific observations about Merseyside. I am grateful, as are other Merseyside MPs, for the dialogue that we have been able to develop with our right hon. Friend the Paymaster General about the future of objective 1. We had a meeting in her office, and the door is still open. She paid us a visit a couple of months ago, and productive discussions about our approach in future are under way between Members of Parliament and Ministers, and between officials from local government on Merseyside and officials in the Treasury and the Department of Trade and Industry. The hon. Member for St. Ives painted a gloomy picture, but there is hope that the process of changing to a new system will be managed in a beneficial and helpful way.
	I take issue, however, with people who argue that the Commission's proposals are the answer to the problem. The issue needs to be reviewed, as the hon. Member for Montgomeryshire (Lembit pik) suggested, because the membership of the new accession states means that there will be a statistical shift in the average GDP, thus affecting the 75 per cent. cut-off. Areas such as Merseyside, although we are not yet prosperous by any means, will find it more difficult to qualify for objective 1 funding. The same may be true of Cornwall, but I am not in a position to say. Cornwall will still qualify, and it could be under that formula. That is more doubtful in Merseyside's case, partly because of the dramatic improvement that has taken place in our economy since the advent of a Labour Government.
	If we were to go along with the Commission's proposals as they now stand, I understand thatmy right hon. Friend the Minister will correct me if I am wrongfor every 14 the Government put into the fund, objective 1 areas will get the benefit of 1. I know that the Liberal Democrats are generally pretty profligate with taxpayers' moneyin theory, at leastbut it is a really poor deal to raise 14 to get 1 back in return. If the hon. Member for St. Ives will forgive me, I do not think that the Commission's proposals are the most sensible way of conducting these matters.
	I would like to make one more general point. I do not wish to appear ungrateful, but we now have a number of different funding streams for areas, such as mine and that of my hon. Friend the Member for Liverpool, Walton (Mr. Kilfoyle), that still have economic and social problems. The neighbourhood renewal fund, the new deal for communities, which touches on part of my constituency, and the single regeneration budget all provide additional resources and are very welcome, but there is a difficulty in that too many funding streams come into areas such as ours. There is some duplication, and certainly confusion. It would be sensible from the Government's point of viewand this is probably the intentionfor them to bring all the funds together, package them so that the same imaginative range of measures as are being carried out already can continue, but focus them more sharply on the areas that really need the most attention. I hope that out of the productive discussions that are going on, we can achieve that.
	I now wish to make some Merseyside-specific points. I will be brief, because I think that my hon. Friend the Member for Liverpool, Walton will add to them. My constituency and Merseyside have benefited enormously from objective 1 funding. The local college, Knowsley community college, has sites in Knowsley, South and in Kirkby, in my constituency, and it has received enormous assistance from objective 1 for courses and other developments. We have transport improvements, and investments in industry and in the North Mersey business park, which my right hon. Friend the Paymaster General visited recently. That has enabled many small businesses to take off in a sheltered and helpful atmosphere. An awful lot is being achieved already, particularly in Knowsley and in parts of Sefton. I pay tribute to the contribution that local government has made towards that, because it has been enormously helpful in those areas in particular.
	The hon. Member for St. Ives referred earlier to Liberal Democrat Merseyside, but I have to tell him that only part of Merseyside is Liberal Democrat, and in terms of objective 1, it is the worst performing part. My hon. Friend the Member for Liverpool, Walton will probably bring more examples to bear if he is fortunate enough to catch your eye, Mr. Speaker, but I shall name three projects that have received support from objective 1. As a result of the actions of the Liberal Democrats in Liverpool, two of them will never see the light of day.
	The first is the prestigious Kings Dock waterfront development, which might have brought a football club to the area. It would certainly have provided a stadium for concerts, a facility sadly lacking on Merseyside. There was a great deal of attention in the media, and a great deal of spinning on the part of the Liberal Democrats in Liverpool, but where is that project now? There will be a development on the Kings Dock, but it is much scaled down. The Liberal Democrats squandered the opportunity.
	The fourth grace was supposed to be a prestigious piece of architecture to go alongside the Three Graces on the waterfront on Merseyside, which have a worldwide reputation. Much money was spent and there was a great deal of objective 1 involvement. A design competition was held and an imaginative futuristic design was selected. It might not have been to everyone's taste, but it was an important venture. Where is it now? Scrapped. No fourth grace. A lot of money was spent and there was a great deal of European commitment to itbut Liverpool city council, Lib Dem-controlled, failed to deliver.
	The project that affects me the most is the tram scheme. Labour-controlled Merseytravel has a proposal, which will still be implemented, to link Liverpool city centre with Kirkby in my constituencya hugely important development, not only in terms of transport but in terms of economic development. Every area that it goes through is a Pathways area, which under objective 1 is designated as the areas under most stress. The scheme is brilliantly designed. Who nearly wrecked it? The Liberal Democrats on Liverpool city council, by arguing, among other things, about whether the stanchions to the tramline in William Brown street should be black or grey.
	The scheme, which had objective 1 money from Europe, was nearly wrecked. I believe the Liberal Democrats in Liverpool wanted to wreck it because they wanted it to go along a different route. They did not want it to go through the poorest areas, but through the leafiest suburbs, where they are gathering votes. Although we are grateful for the work that the Government are doing and for all the assistance that we have had through objective 1, I hope that the Minister will keep a careful eye on the capacity of the Liberal Democrats in Liverpool to squander those benefits and make the whole region a laughing stock.

Peter Kilfoyle: I, too, congratulate the hon. Member for St. Ives (Andrew George) on securing the debate. As has been evidenced this evening, hon. Members from around the country have a great interest in the outcome of the conversations about objective 1 taking place in Government and in the European Union. However, the hon. Gentleman did himself and objective 1 a disservice when he spoke about it in the terms that he used. Let me remind him of the background, from the perspective of an area that had objective 1 status long before Cornwall.
	Twenty-three years ago, a journalist called Stanley Reynolds wrote an article entitled The Museum of the Horrifying Example. It was a caricature, in my view, but an unhealthily realistic one, of Liverpool at that time as a stereotypical city in post-industrial decline. The city laboured for another 10 years under that image of itself, due mainly to Sir Geoffrey Howe's report, The Managed Decline of Liverpool, which would have consigned the city to oblivion. It was a difficult time to live in the city and to champion it, not least because of the problems there.
	Along came objective 1. I mentioned in an earlier intervention the two key levers in Merseyside's caseBruce Millan and Graham Meadows. I appreciate what was done by MEPs and other interests, but those two men made the moves that enabled Merseyside to get objective 1 funding. That was unique. The Highlands and Islands of Scotland and Northern Ireland got it, but they had Government offices that could act as the interlocutors in all that needed to be done between the Commission and the recipients of the funding. We did not have that.
	The Tories set up a monitoring committee, which was a total and abject failure to begin with. I would argue that in some ways it did not improve a lot over time. It consisted entirely of public servants and quangocrats to begin with. The private sector was the first to renege on it. I was told that I could not meet anyone without the express written permission of the Minister concerned, because there was no locus for mere Back Benchers, particularly Opposition Back Benchers, anywhere in objective 1. Nevertheless, we struggled through and obtained objective 1.
	We are unique in another sense in that, as far as I am aware, we are the only objective 1 area to get a second tranche of objective 1 support. The reason was simple. It was said that we had not made that 75 per cent. GDP cut-off point, which, at least as far as the statisticians in Europe were concerned, would enable people on Merseyside to stand on their own feet. We were more than grateful to receive it a second time round.
	The hon. Gentleman implied, to put it no stronger than that, that we were naive in our optimism following discussions with the Paymaster General. The last thing that the hon. Gentleman can say about me, and about my colleagues on Merseyside, with our long and bitter experience, is that we are naive about these matters. I still have my reservations about the outcome of the negotiations, as we were all right to do. We should be critically constructive in what we want out of those negotiations. But at the end of the day it is the outcome that counts, and whether that form of aid is repatriated does not matter one jot to people in his constituency, my constituency or anybody else's constituency. What they want to see is their material lot improved, in whatever form it takes, and this is a damn good form. I trust the Paymaster General and accept that she was acting in good faith when she assured us that there would be no loss within those regionsthat the regions would be supported on the basis of their need.
	Other things have happened in the recent past that emphasise how the Government are refining their way of defining need. Now we do not do it on a ward basis, as the hon. Gentleman knows. The Office of the Deputy Prime Minister produces lists of specific output areas to define deprivation. I am keen on objective 1 and on continuing to get a good deal, because the No. 1 SOA for deprivation is in my constituency, as is the No. 10. In fact, the whole of my constituency is in the top 1 per cent. of every one of the deprivation indicators. So I have more than a vested interest in ensuring that whatever funding is coming in remains, in order to benefit those people.
	But I do have a problem, and it is one that I discussed with the Chancellor just before Christmas. The main delivery agency is a Lib Dem council, which fails to deliver in an impartial way in the areas of most need. It was difficult before for Government Departments to pinpoint what was happening, but now we can pinpoint that we have a council that is not doing what it ought to be doing in terms of social justice. The figures will pan out in a macro way across Liverpool and Merseyside as a whole, but it will only be by concentrating those in need in specific areas, for the purpose of political gerrymandering, in my opinion. I hope that the Government will address that.
	I sincerely believe that the Government will address the need for a long taper that will ensure that the many good projects that are going through, across Merseyside as a whole and in my own city of Liverpooland, I am sure, in Cornwall, South Yorkshire and Waleswill continue.

Andrew George: I too have no doubt that there are local matters that need to be sorted out locally. I cannot possibly second-guess what is going on within and between councils in the Merseyside region. The hon. Gentleman said that I was accusing him and some of his colleagues of being naive, but I can reassure him that while I was encouraged by the statements made by a variety of Ministers, they do not provide the cast-iron guarantee, which I think is already on the table with regard to the EU. I am not accusing the hon. Gentleman or his colleagues of being supine. Many accusations have been made against me, but I have not made extravagant accusations against him and his colleagues in quite the same way.

Peter Kilfoyle: I take on board what the hon. Gentleman says. In a grown-up world we all have to recognise that circumstances change. I recall that in an intervention I was making the point to him that government is an organic process. It is not preserved in aspic from one year to the next, as it has to cater for changing circumstances. The object of objective 1 is to enable some areas, whether in Cornwall, Merseyside or South Yorkshire, to compete on the same basis as others. Previously, those disadvantaged areas have not been able even to get into the same ring as the others.
	In the case of Merseyside, given that the taper will come in across the country as a whole, I sincerely hope that our share will enable us to carry on with the resurgence that is taking place, together with the other funding streamsI echo the comments of my hon. Friendswhich are just as important, and are coming into the area of the hon. Member for St. Ives as much as into mine. If there is real good will in objective 1 areas and a willingness to act objectively in the interests of people there, along with meaningful dialogue in the Council of Ministers, I do not believe that, even given the augmentation of the European Union with 10 accession states, there will be a problem down the line.
	We are all big and bold enough to recognise that there will be areas, perhaps like Cornwall, that will need to qualify for some time to come. Some of us, however, are hoping that the programme will be successful in achieving its aim. That is why we are positive about it; it is a damn good scheme. I ask the hon. Gentleman to bear it in mind that the scheme, which was brought in under the Tories against their wishesthey did not want objective 1, and tried to frustrate ithas achieved effects that are undeniable in terms of regenerating areas and uplifting the aspirations and hopes of citizens within them.

Jacqui Smith: I congratulate the hon. Member for St. Ives (Andrew George) on gaining this debate. It has perhaps been longer than some of us might have expected, but it has been a very useful opportunity for many hon. Members across the House, although only on the Labour and Liberal Democrat Benches, to represent their constituencies passionately and to articulate clearly the significance of ongoing support for the parts of our country, as well as countries that are parts of our nation, on which we need to focus attention to ensure that we can achieve the sort of economic growth and prosperity that all those who have spoken want to see for their constituencies.
	At the heart of the debate is a call for a positive approach to regional policy and the argument about the best route for funding that regional policy. One of the reasons why the argument has moved on is that, during the time when my hon. Friend the Member for Blaenau Gwent (Llew Smith) was arguing the need for objective 1 in the European Parliament, regional policy in this country was a dirty word. We had a Government who did not believe in investing in ensuring that we closed the disparity in growth rates between different regions in our country and did not believe, as this Government passionately do, in investing in things that will make a difference to productivity in areas that most need them, whether that includes skills, infrastructure, enterprise or new technology. The different context now is that we have a Government who are passionately committed to a strong regional policy and have been willing to invest money behind that commitment.
	As the hon. Member for St. Ives gained this debate, let us take Cornwall as an example. The Government are making a major contribution to key regeneration schemes in Cornwall. He listed a range of ways in which the Government are contributing to Cornwall, partly to make a point about the streamlining of funding, to which I shall return later. He also demonstrated precisely the commitment that a UK domestically funded regional and social policy is making to Cornwall and, I suspect, to the constituencies of many other hon. Members who are present.
	Let us think about the investment in Cornwall. The Government are providing massive levels of match funding for Cornwall's current objective 1 structural funds programme. We have already provided some 28 million for the first phase of the Combined Universities in Cornwall, which is, as my hon. Friend the Member for Falmouth and Camborne (Ms Atherton) rightly pointed out, a dynamic partnership of higher and further education institutions.
	It being Seven o'clock, the motion for the Adjournment of the House lapsed, without Question put.
	Motion made, and Question proposed, That this House do now adjourn.[Mr. Watson.]

Jacqui Smith: We are currently considering proposals for funding a further phase.
	We are supporting the work of the Urban Regeneration Company in the constituency of my hon. Friend the Member for Falmouth and Camborne, which is a multi-million-pound investment programme for Camborne, Redruth and Pool. Ambitious plans exist to regenerate the centre of St. Austell. We have recently announced the dualling of the A30, which will constitute a major improvement to Cornwall's road infrastructure.
	At the same time, the Government are operating and contributing to a large number of domestic programmes in the peninsula. We are providing 46 million to offer development opportunities for young people in Devon and Cornwall under the Connexions scheme. Cornwall received some 8 million under rounds 4 to 6 of the single regeneration budget. We are providing annual funding of some 750,000 per year for each of seven Sure Start projects in Cornwall. Those are just a few examples of the Government funding that goes into Cornwall and the Isles of Scilly.
	As a Trade and Industry Minister, I am particularly proud of the regional grants from my Department, such as 2.9 million for the renovation of the Pendennis shipyard in Falmouth and 2.5 million for the development of the Tripos pharmaceutical research centre in Bude. Those two projects alone have created or safeguarded more than 400 jobs in the Cornish economy.
	We can now boast a dynamic regional policy for Cornwall and for the whole of the UK. My hon. Friend the Member for St. Helens, North (Mr. Watts) is an important proponent of regional policy in all its forms. He made the point that it is essential to understand that three quarters of public spending on regional development in the UK already comes from domestic sources. We must recognise that, under any scenario, that proportion is set to increase further in the near future. The enlargement of the EU and the entry of 10 poorer countries means that EU regional funding will inevitablyand rightlyshift to the new member states. Richer countries, such as the UK, will increasingly depend on national resources to fund their regional development.

Andrew George: I am grateful to the Government for the investment that the Minister has listed. Will she acknowledge that Cornwall's GDP, which is about 65 per cent. of the EU average, is less than that of a significant number of regions within the accession countries that will get objective 1 status?

Jacqui Smith: I certainly recognise the particular issues in relation to Cornwall, but I disagree with the assumption that the future measurement and definition of future objective 1 regions is cut and dried, and I shall go on to explain why. However, I am not attempting to argue that Cornwall does not have particular needs that must be addressed. Through our regional policy, this Government are better equipped than the Government were 10 or 20 years ago to address those points. The new situation requires a fundamental reappraisal of EU regional policy. We are determined to push for the effective reform of the structural and cohesion funds to deliver a good result for the UK and its nations and regions as well as for other EU member states.

Dave Watts: Although many of us, including myself, believe that the structural funds have been helpful, they have in-built problemsfor example, the rigid criteria used to determine how much can be spent per head. Merseyside would, on occasion, have expected to receive more for transport schemes than is given to major schemes such as Liverpool airport. I know that the Robin Hood airport in Yorkshire is looking for resources. I would hope that our scheme or the European scheme allowed far more flexibility locally for deciding priorities. Will that be an aim?

Jacqui Smith: My hon. Friend makes an important point. I shall come on later to the fundamental reappraisal that I mentioned.
	We set down our objectives for the reform of structural funds at the beginning of the process. The UK has five main objectives. We want to develop an EU regional policy that fully supports, and adds value to, the ambitious devolution, decentralisation and regional development agenda that we are already pursuing and are committed to domestically. We want to ensure that the structural funds throughout the EU actively support the EU's agenda set at Lisbon, Gothenberg and elsewhere for higher productivity, employment and sustainable development. We want to concentrate the EU's limited financial and administrative resources on the poorest member states, which are most in need of assistance. We want to develop simpler and more flexible implementation and monitoring arrangements for structural funds programmes which are proportionate to the amount of funding available and in which the bureaucracy does not outweigh the potential benefits. Finally, we are determined to secure a fair budgetary deal for the UK taxpayer and a total EC budget of no more than 1 per cent. of EU gross national income.

Andrew George: I need to ask this question of the Minister one more time. She acknowledges that Cornwall's GDP is about 65 per cent. of the average in EU member states and therefore lower than that of many regions in accession states that will benefit from objective 1 status. Does not she agree that those funds should be directed at the poorest regions in the 25 member states, rather than accession states being favoured?

Jacqui Smith: I believe that wherever in the EU regional policy funds come from, they should be directed where the need is greatest, but we do not necessarily need the recycling of resources that means that the richest member states send money to Brussels in order for it to be allocated back to them. The most efficient way is for those countries that have the necessary administrative and financial resources to use domestic resources for their regional policy, supporting regions such as Cornwall. I have no compunction in saying that the county needs support. At EU level, however, we should be focusing on what adds value and ensuring that we focus resources on the poorest member states.

Andrew George: Will the Minister give way?

Jacqui Smith: May I make a little progress first?
	That is why we have made detailed proposals for reform as a means of securing those objectives. We propose that in future the richer member states should fund regional programmes from domestic sources and that the EU's limited resources should be focused on the poorest member states where, as I said, that intervention is likely to have the greatest impact and the greatest added value. Interestingly, that would foster genuine EU solidarity and help to ensure that the enlargement of the EU to 25 member states is a success.
	At the same time, howeverI hope this responds to the hon. Gentleman's concernswe remain fully aware of the challenges faced by regions in the UK, and particularly those with current objective 1 status, and we are determined to support their continued economic development. It is for that reason that we have made an unprecedented guarantee, if our reform proposals are accepted, to increase domestic funding for regional policy in the UK. If our proposals are accepted, we will increase domestic funding for regional policy by the amount that our regions would have received under a no-reform scenario in an enlarged EU, and focus those additional resources on areas of high unemployment and low GDP, as typically seen in regions with current objective 1 status and in the constituencies of hon. Members who have contributed to the debate.

Andrew George: rose

Jacqui Smith: The hon. Gentleman asked me for more detail about the guarantee, and I am about to come to that. Does he still want to intervene?

Andrew George: I do. The Minister has repeatedly used the term region. Will she clarify whether these funds would go to the Government regional development agency zones or to the EU regions where programmes exist because of the special problems in those areas?

Jacqui Smith: As I said, we have not decided on the detail of the delivery arrangements for the additional money. My hon. Friend the Member for Liverpool, Walton (Mr. Kilfoyle) made an important point about our ability to be much clearer about where we are able to focus resources. If it will reassure the hon. Member for St. Ives and my hon. Friend the Member for Falmouth and Camborne, I repeat that I am not trying to argue that Cornwall is not a needy area of the UKit is, and I would expect any future arrangements to be able to focus resources on it because of its particular needs.
	I want to return to the guarantee. The hon. Member for Truro and St. Austell (Matthew Taylor), who paid a short visit to the debate to pour scorn on the Government's guarantee, is not here to hear what I hope will be my reassuring comments about it. The Government set out the detailed methodology for applying the guarantee in their written statement to Parliament of 11 December 2003. I have already spelled out in broad terms what that would be. It is not possible at this stage to calculate the exact value of the guarantee, just as it is not possible to calculate the exact value of future structural funds receipts under the different reform scenarios that are being proposed by the Commission, because structural funds are allocated by reference to statistics on regional economic performance across the EU in the most recent three years for which data are available prior to the programming period. We are probably unlikely to have those data until the end of 2005 or the beginning of 2006. Frankly, anybody working on the basis of those figures at the moment is using data that, at the very best, will be outdated.
	Hon. Members expressed concern about the duration of the guarantee. I stress that the Government have made it clear that the guarantee would apply for the full period of the next cycle of the structural funds programme. We fully recognise the benefits of long-term budgeting and planning. It should not be forgotten that we introduced three-year spending review plans, which have become the accepted basis of public spending, or that in some areas we have made spending assumptions over an even longer period than that. This guarantee is one of those examples of an area where the Government have made a long-term spending commitment for more than three years. That reflects our very strong commitment to regional development.
	I was asked whether this is new or additional money. The guarantee would be subject to the same additionality requirements as current structural funds allocations to ensure that the new money does not replace pre-existing structural expenditure. So that means that the guarantee would be entirely additional to the Government's current domestic expenditure on regional development, including the domestic resources that are used to co-finance structural funds programmes in our regions.

Andrew George: I am grateful for the clarity with which the Minister is responding to specific questions. That is extremely helpful. However, a Labour Member made the point that the political cycle in the UK can be no longer than five years. How can the Minister guarantee funding for the same length of time as the EU, which can fund a seven to nine-year programme, when the political cycle in this country is only five years?

Jacqui Smith: First, the EU cannot guaranteeand has not yet guaranteedfunding for the period that the hon. Gentleman mentions. I shall say more about that shortly. Secondly, of course we are all subject to changes of Government. Given that the hon. Member for Montgomeryshire (Lembit pik) suggested that the only two alternatives are a Labour Government or a Liberal Democrat Government, we have nothing to worry about if we can believe Liberal Democrat pledges. However, it would be difficult, given the strength of the commitment that we have made in the guarantee and its multi-year nature, for any Governmentalthough I do not expect a different Governmentto go back on it.
	Hon. Members asked about the way in which we deliver the guarantee. As I said, we have not worked through the details of the administrative arrangements, but we have made it clear that we want to build on the positive aspects of current structural funds programmes, including devolved delivery, the sort of partnership working to which the hon. Member for St. Ives referred and multi-annual funding. I shall have to depend on the efforts of my hon. Friends the Members for Knowsley, North and Sefton, East (Mr. Howarth) and for Liverpool, Walton to deal with the difficulties of Liberal Democrat Liverpool council, but I have every faith that they will do that.

George Howarth: My right hon. Friend, like several other Ministers, is welcome to join us in that little enterprise.

Jacqui Smith: If my hon. Friend examines my constituency majority, he will realise that I have other fish to fry. However, if I have any spare time I shall be up there to help. I hope that I have given some reassurances about the guarantee.

Dave Watts: Will my right hon. Friend clarify exactly what the guarantee reflects? Many Labour Members believe that the poorer areas should be no worse off than they would have been had enlargement not taken place. We accept that resources need to go to the new areas, but we do not believe that the poorest regions should pay for enlargement. Will she give us some assurance about that?

Jacqui Smith: I think that I have spelled out what the guarantee would mean. It would maintain the same criteria, but in a post-enlargement environment. Of course, that relates to only a quarter of resources that come into regions from structural funds. My hon. Friend and other hon. Members who represent similar areas will continue to argue for increased investment in our regions. I simply point to the Government's record, which has been of continuous increased investment in the sorts of constituencies that hon. Members who are present represent.
	It is also important that the process engages stakeholders. We are holding an ongoing dialogue on that. As my hon. Friend the Member for Falmouth and Camborne said, and following the strong representations that she and other Cornwall Members of ParliamentI have to say that she, in particular, is on my backhave made, my hon. Friend the Economic Secretary has worked with key Cornish stakeholders, including Cornwall county council, Cornwall Enterprise and the South West of England Regional Development Agency, to discuss future arrangements and how to ensure the most effective funding deal for Cornwall. We have especially considered different funding streams and how we can use them as flexibly as possible to ensure that, as my hon. Friend rightly says, the funding gets to the areas of Cornwall where it is needed, that it is maximised most effectively and that the best use is made of it.
	Let me turn now to the Commission's proposals for reform of the funds. I can understand why hon. Members want to compare the Government's proposals with what they believe to be on offer from the Commission. The Commission's proposals were set out in its third cohesion report of February 2004 and in a package of draft structural and cohesion funds regulations for the next financial perspective, which was published in July 2004.
	The Government welcomed aspects of the Commission's approach, including its proposals to strengthen the strategic focus of EU regional policy on the Lisbon and Gothenburg agendas. However, we have serious concerns regarding aspects of the Commission's approach. First, that approach isin our view, and in the view of the majority of contributors to the budgetdependent on an unaffordable expansion in the EC budget. The Commission is advocating a major 33 per cent. real-terms increase in the structural funds budget for the next EC financial perspective. We oppose that considerable increase, but the hon. Member for St. Ives gave the impressionI do not know whether he meant tothat what we were proposing in our financial perspective negotiations was somehow a cut in the available funds. That is not the case. A 1 per cent. of EU gross national income budget in Europe is still an increase on the current financial perspective an increase, in fact, of 6.5 per cent. in real terms. So, yes, we are arguing that we need resources to go into that project. We are also arguing, however, that they should be spent in a way that adds the most value.
	Secondly, the Commission's proposals fail to focus the EU's limited resources on key priorities such as the economic development of the poorest member states. This is where the proposals fail the test of whether they are focusing in the right area because, at European level, that should be where those resources are focused. Thirdly, the Commission's proposals do not go far enough to simplify the bureaucratic arrangements for implementing programmes or to give member states, their nations and their regions greater flexibility to deliver programmes that genuinely reflect local needs.
	The hon. Members for St. Ives and for Montgomeryshire, and my hon. Friend the Member for Knowsley, North and Sefton, East rightly mentioned the range of Government programmes and initiatives, but argued that in some cases they were too fragmented and bureaucratic. I have some sympathy with that argument, and the Government are currently working on ways of ensuring that those many different funding streams can be more coherently brought together in the regions.
	However, when we talk about bureaucracy and difficulty, it is usually the EU structural funds programmes that are the villains of the piece. In 2003, the Government commissioned an independent study by Ecotec Consulting on the added value of structural funds programmes in the UK, which reported that the administrative processes for delivering structural funds programmes were widely described as a burden and as more resource-intensive than domestic programmes. Of course, one of the things that causes fragmentation in objective 1 regions is the distinction between whether the money is coming through a structural funds routewith all the administration that that involvesor through a domestic route. The domestic route might also involve administration and bureaucracy, but what we have set up by sending the money through both the European and domestic routes is an additional fragmentation, and our proposals would help to overcome that in relation to the delivery of programmes and funding.

Andrew George: Does the Minister accept that a large number of EU member states that enjoy objective 1 status bring together both nation state and EU funding programmes in the form of a one-stop shop, involving one place of entry and one application form? They bring the administration together so that the people involved who have to interface with the process are not faced with complexity and bureaucracy. It has therefore been possible for a large number of European states to overcome the kind of bureaucratic difficulties that she has described.

Jacqui Smith: I do not disagree with the hon. Gentleman on that. A lot of work in the UK has gone into making sure that that administration is as smooth as possible. My hon. Friend the Member for Vale of Clwyd (Chris Ruane) rightly praised the work of those involved in the management of structural funds programmes in making sure that that is as effective as possible.
	What do our proposals mean for current objective 1 regions in the UK? I am aware that the Commission's expansionist budgetary proposals hold superficial attractions for some UK stakeholders. As I have tried to explain, however, the Commission's proposals would, in our view, offer a poor deal for the whole UK and no security for our objective 1 regions. In contrast, the Government's approach offers a genuine guarantee of continued funding for our poorest areas, and a fair deal for the taxpayer.
	First, it is important to understand that the Commission's proposals in no way constitute a credible offer of funding for the UK's regions. As I suggested earlier, net contributors to the EC budget, such as France, Germany, Austria, Sweden and the Netherlands, are firmly opposed to the Commission's budgetary proposals and share the UK's determination to maintain that total EC budget of 1 per cent. of EU GNI. Liberal Democrats have a touching faith in the Commission, which, perhaps understandably, they do not have in a Labour Government. They have faith, however, in Commission proposals that promise money from a pot that does not yet even exist, and which will not be agreed by member states. The debate needs a bit of reality.
	Secondly, it is essential to remember that money does not come from Europe as if by magic. As one of my hon. Friends pointed out, the UK is a net contributor to the EC budget. All receipts from the EU will come at a cost to the UK taxpayer. It is not free moneycurrently, we contribute about 1.6 for each 1 that we receive. Therefore, in order to continue to receive substantial structural funds receipts following enlargement, it is inevitable that the UK will have to make much greater contributions to the EC budget, leaving less money available for domestic spending on regional policy.

Andrew George: The Minister says that the debate needs reality, but it also needs parity. It is not beyond the wit of man or woman to conceive of a scheme that allows for a 1 per cent. budget but that also targets that money at those regions in Europe that are entitled to objective 1 aid. That would mean that regions in some of the 15 earlier member states would be entitled to objective 1 status, just as the accession states will be.

Jacqui Smith: But the argument comes back to whether we want to see contributions being recycled from richer member states back down to richer member states, through Europe, or whether we want to focus domestic resources on regional policy. That is part of the fundamental difference that we have.
	In contrast to the Commission's proposals, the Government's guarantee represents a firm commitment, if our approach to reform is adopted, to increase resources for regional policy in the UK for the whole of the next structural funds cycle. We therefore believe that the guarantee offers far more certainty for current objective 1 regions than the Commission's unrealistic and unsustainable approach.
	Fundamentally, I want to underline again this Government's determination to tackle persistent regional disparities within the UK and to achieve a successful outcome to the negotiations on reform of the structural funds. We are convinced that our reform proposals, and perhaps even more importantly our proven commitment to regional policy, will ensure the best deal for the UK's nations and regions. We will set EU regional policy on a sustainable footing. We will ensure genuine solidarity between member states. We will also ensure prosperity and continued economic growth in the constituencies of hon. Members present here today.
	Question put and agreed to.
	Adjourned accordingly at twenty-nine minutes past Seven o'clock.